OTTAWA (Reuters) - There are signs that G7 nations outside the United States will take additional action to mitigate the effects of the financial crisis, Canadian Finance Minister Jim Flaherty said on Monday.
Canada, like most other Group of Seven governments, has so far responded coolly to efforts by U.S. Treasury Secretary Henry Paulson to get others to follow in his footsteps and buy up bad mortgage-related debts from stressed financial institutions.
“There are some indications already that there will be additional actions outside the United States ... that would be co-operative with what the United States has done,” he said, referring to a statement by the Group of Seven industrialized nations earlier in the day.
He declined to name which country or countries he was referring to. “I’ll leave it for those finance ministers and those central bank governors to speak for their own economies,” he told reporters on a conference call.
“There’s no secret to the fact that the U.S. would like other jurisdictions to emulate their course of conduct, and that is to try to remove the illiquid assets that are destabilizing financial institutions in those countries where that is the case,” he said.
“That is not the case in Canada.”
After announcing a planned $700 billion rescue package in the United States to help unclog the financial system, Paulson had said he was pushing other countries to follow suit.
Canadian Prime Minister Stephen Harper earlier on Monday refused to say whether he supported the U.S. bailout plan and suggested that Washington was to blame at least in part for the mess it now finds itself in.
“I‘m not going to take sides on particular proposals before Congress,” Harper said.
“You got into a situation in the United States where, unfortunately, when the market makes profits those profits go to private interests, and when the market makes losses that becomes the loss of the government,” he said.
But Flaherty showed more solidarity with the United States, Canada’s top trade partner.
“I think Secretary Paulson’s plan gets to the root of the problem in the United States and so it should help stabilize their situation, which in turn will reassure global markets more generally,” he said.
Flaherty said Canada’s Conservative government, now in the middle of an election campaign, takes very seriously the line in the G7 statement to “take whatever actions may be necessary.”
“Those words are intentions. If we in Canada find it necessary to act individually, then we would act,” he said.
“We have, over a longer period of time than the last couple of weeks, looked at what tools we have available in our regulatory capacity and of course the governor and the Bank of Canada have more leeway now than they did before, given the increased legislative authority we gave them in the budget bill this year.”
Reporting by Louise Egan; editing by Rob Wilson