TORONTO (Reuters) - Canada’s financial regulations have left it in relatively good shape in the midst of a global economic crisis and should be seen as a model for world leaders slated to meet next month in Washington to address the turmoil, Finance Minister Jim Flaherty said on Sunday.
In an interview with television network CTV, Flaherty said Canada’s stringent oversight could help it escape an economic recession and maintain a budget surplus.
“I think it’s quite possible that Canada can (avoid recession),” Flaherty said. Canada remained on track for a “modest” budget surplus this year, though it was too early to predict next year’s outcome, he said.
World leaders will meet next month in the United States to address the liquidity crisis, which emanated from a U.S. housing slump, battering world markets and sending consumer confidence to its lowest levels in decades.
European leaders have said the global financial system needs to be overhauled.
Flaherty said Canada would support a globally coordinated effort to shore up the financial system and that the nation could be seen as a model of how to avert a U.S.-style financial meltdown.
“We have high capitalization requirements and that is something that can be looked at elsewhere, and of course the regulation of institutions, all institutions that participate in the market, not just the banks,” he said.
Despite Canada’s relative economic health, a global effort to shore up the financial system and continued measures to improve market liquidity remained important to Canada’s economy, he said.
“We have the soundest banking system in the world but we’re not an island, we get buffeted by what’s going on in other places and we’re in the midst of that now.”
Reporting by Richard Valdmanis, editing by Chris Wilson