TORONTO (Reuters) - Finance Minister Jim Flaherty said on Sunday the instability that has rocked the global financial system in recent weeks highlights the need to set up a federal securities commission in Canada.
“It would help,” Flaherty said in support of a proposal to bring securities regulation, now handled by the provinces, under federal control. “We have to make sure that this system is stable, so we have to make sure that all of the participants (in Canadian financial markets) are properly capitalized.”
In an interview with CTV about three weeks before an October 14 general election, the minister said: “This is for the sake of all of us in Canada, where many people have pension plans and RSPs,” or retirement savings plans.
Prime Minister Stephen Harper’s Conservatives hold a wide lead in the polls over the Liberals, led by Stephane Dion.
Flaherty said he expected stepped-up international discussions about subjecting investment banks to capitalization requirements and similar regulations that currently apply to chartered banks.
Flaherty said the country’s banks and insurance companies were on solid footing, in part because of careful monitoring by Canadian regulators, and Canadians had no need to worry about their stability, in contrast to their U.S. counterparts.
“What we do have to be careful about is not taking risks in our economy like Mr. Dion is prepared to take with a huge new tax. That’s not a good idea at a time of some instability globally,” he said.
Dion has made a proposed tax on carbon fuels the central plank of his party’s efforts to replace Harper’s minority Conservative government, which has held power for the past 2-1/2 years.
Flaherty said he supported the proposed $700 billion financial bailout plan being worked out by U.S. policy-makers over the weekend because it was necessary to bring stability to the U.S. economy as well as Europe, Japan and Canada.
Reporting by Frank McGurty; Editing by Gary Hill