October 8, 2008 / 4:29 PM / in 9 years

New Democrats want more bank oversight

CALGARY, Alberta (Reuters) - Jack Layton, leader of the federal New Democratic Party, said on Wednesday the government should tighten regulations governing the country’s banks to make sure the failures and forced mergers seen in other countries don’t spread to Canada.

<p>Supporters of New Democratic Party Leader Jack Layton listen to his speech during a campaign stop in Vancouver, British Columbia October 6, 2008. REUTERS/Andy Clark</p>

Speaking at a campaign stop in Edmonton, Alberta, ahead of the October 14 general election, Layton called for closer oversight of the banking sector because of the spreading turmoil in global markets.

“We will re-regulate the banks and we’ll make sure no one is gambling with your savings.” he said. “We are going to invest in the real economy, which means we are going to work to create and protect your jobs.”

The financial crisis spreading around the globe from Wall Street has sent world stock markets plunging and reinvigorated a Canadian election battle that was once seen as a sure win for Prime Minister Stephen Harper and the ruling Conservative party.

The Conservatives’ lead over the main opposition Liberals has narrowed in recent polls, with fears of a recession growing as the financial turmoil spreads.

Harper’s rivals, including Layton and Liberal Leader Stephane Dion, have sharpened their attacks on his handling of the economy and his perceived lack of empathy with Canadians who have seen their investments dwindle as shares fall.

Finance Minister Jim Flaherty said on Wednesday that his department and the Office of the Superintendent of Financial Institutions “strictly monitor” the Canadian banks’ regulatory capital ratios.

“I can say with confidence to Canadians today that our financial institutions are well capitalized, which cannot be said in a number of other countries in the world,” Flaherty told reporters in Toronto.

Flaherty, who is seeking re-election in a district just east of Toronto, also said the federal deposit-insurance limit of C$100,000 was sufficient, even as other countries have been raising their deposit insurance levels.

“I‘m satisfied that our banks are well capitalized and that the savings of Canadian are secure with the system as it is now,” he said.

The prime minister has also said that Canada’s economic and banking fundamentals are sound, and the country needs a steady hand to stay the course -- a stand that has largely drawn derision from his opponents.

“We also got another piece of advice from Mr. Harper yesterday,” Layton mocked on Wednesday. “Go out and invest in the stock market and look for bargains. I‘m serious.”

Layton’s New Democrats have been running third in the polls behind the Conservatives and the Liberals, with support around 20 percent, versus 32 percent for the Conservatives and 25 for the Liberals.

Reporting by Scott Haggett and Lynne Olver; editing by Rob Wilson

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