June 13, 2009 / 4:48 PM / in 8 years

Canada finance minister reassured on stress tests

NEW YORK (Reuters) - Canadian Finance Minister Jim Flaherty on Saturday said he was reassured at a meeting of his Group of Eight counterparts over their commitment to so-called stress-testing of their financial institutions.

<p>International Monetary and Financial Committee (IMFC) Chairman Youssef Boutros-Ghali (L), U.S. Treasury Secretary Timothy Geithner (C) and Canada's Finance Minister Jim Flaherty talk during a break at the G8 finance ministers' meeting in Lecce June 12, 2009. REUTERS/Claudio Longo/Pool</p>

“I‘m much less frustrated given conversations we’ve had last night and today in Lecce,” Flaherty said during a press conference after the meeting in southern Italy of finance ministers from the G8 leading industrialized countries.

Flaherty said his European counterparts have agreed to carry out the stress tests, aimed at assessing the financial resilience of their banks, but he added that differences persist on whether the results should be reported for individual institutions as well as on an aggregate basis.

“There is an agreement that stress tests are important and they will be carried out,” he said. “There is some disagreement on the way that stress test results should be reported. But there is a commitment to do stress testing.”

The G8 ministers avoided a reference to bank stress tests in an initial draft of their meeting communique after a long debate over whether Europe should follow North America’s lead and publish test results, officials said.

European officials resisted the demands of the United States and Canada, saying they needed first to reach agreement among themselves.

During the press conference, Flaherty also left the door open to opposition parties in the Canadian Parliament to offer him suggestions on economic policy but gave no sign that he thought such input was forthcoming.

“I asked the opposition for suggestions in respect to the budget in December 2008 -- I have received none,” Flaherty replied when asked if he would be willing to engage in discussions with other parties to keep the government in place through the recession.

Michael Ignatieff, leader of the main opposition Liberals, will announce on Monday whether he will introduce a non-confidence motion that could trigger an election and bring down the minority Conservative government.

Speculation has stirred over Ignatieff’s intentions since last week when the government issued a budget update that estimated the deficit in the current fiscal year at C$52.2 billion ($46.6 billion). That’s much larger than the estimate when the Conservatives’ economic action plan was unveiled in January.

The opposition has also criticized the government over its employment insurance policies and what it says is the slow pace of rolling out infrastructure projects to stimulate the economy.

($=$1.12 Canadian)

Reporting by Frank McGurty; Editing by Paul Simao

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