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OTTAWA (Reuters) - The Canadian government staked out an approach to the international financial crisis on Wednesday that is less sweeping than the complete overhaul of capitalism advocated by several European leaders.
A senior Canadian finance official, speaking on condition of anonymity, stressed the need for regulation to start at home, balanced by international coordination, review and peer pressure.
The official, briefing reporters ahead of talks being held by G20 finance ministers in Brazil on Saturday, displayed the same sort of circumspection that U.S. officials have shown on the question of a big revamp of the financial system, and spoke of the need to be pragmatic.
Canada continues to believe that open markets and competition have unleased tremendous growth around the world, so that while more regulation is needed to prevent another crisis, free enterprise should not be stifled, the official said.
Among other points that the official said Finance Minister Jim Flaherty will register with his G20 colleagues this week are:
- all pools of capital should come under the regulatory umbrella
- regulation should look at the system as a whole and not institution by institution
- executive compensation should be aligned with long-term stability objectives.
Each country's review of its own regulatory system should be public and the country should stand up to international surveillance and answer for any gaps others may find in it, the official said.
He also encouraged the United States and other countries to submit as Canada did to the International Monetary Fund's Financial Sector Assessment Program, described as a "comprehensive health check-up" of a country's financial sector.
The United States recognizes it needs to improve its fragmented regulatory system, he said. Canada is also encouraged by the fact that bold steps taken by Washington to confront the crisis seemed to be working, he added.
The meetings in Brazil will help finance ministers to prepare for the November 14-15 summit in Washington called by President George W. Bush.
Additional reporting by John McCrank, Frank Pingue and Ka Yan Ng in Toronto; Editing by Peter Galloway