February 23, 2012 / 4:58 PM / in 6 years

Canada to raise Volcker rule at G20 meeting

TORONTO (Reuters) - Canada will raise its objections to some elements of the U.S. Volcker rule with Treasury Secretary Tim Geithner at a weekend meeting of Group of 20 policymakers, Canadian Finance Minister Jim Flaherty said on Thursday.

Minister of Finance Jim Flaherty speaks during Question Period in the House of Commons on Parliament Hill in Ottawa, February 13, 2012. REUTERS/Patrick Doyle

“The issue that the Volcker rule is attempting to address is not particularly clear with the Canadian financial institutions. It kind of misses the mark when you look at Canadian financial institutions which were not very much involved in proprietary trading,” Flaherty told reporters in Toronto.

“I will discuss it with Secretary Geithner this weekend. And some of our G20 colleagues are also quite interested in the subject.”

A senior Canadian finance official said earlier on Thursday that the U.S. Volcker rule, which limits the ability of banks to make speculative bets with their own funds, is not specifically on the G20’s agenda but is likely to be discussed at the meeting in Mexico.

Canadian policymakers have criticized some parts of the rule, which they say restricts Canadian banks’ operations in the United States that do not threaten the U.S. financial system.

Flaherty also reiterated Ottawa’s position that Europe must increase funding for its own financial firewalls before other G20 nations boost the resources of the International Monetary Fund to help it cope with the euro zone debt crisis.

“This is an issue that European countries have the resources to deal with. They ought to, quite frankly, put their own resources on the table before they go to anybody else, including the members of the IMF, and ask for contributions,” he said.

“The European countries involved here are among the wealthiest countries in the world.”

The finance minister also said Canada’s provinces must join with the federal government in bringing their budget deficits under control.

Writing by Jeffrey Hodgson; editing by Rob Wilson

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