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Senior Contributor

Call for Financial Reform

The Bank of Canada governor is calling for change in financial institions.

Think they will manage to come up with something at the upcoming G20 meeting?

"The time for decisive action on financial reform has come, and banks need to prepare for it, Bank of Canada governor Mark Carney says."

"There is little question reform is needed, he said, dismissing notions that reforms would put a lid on growth. And failure to act is not an option: "We are awash in moral hazard," he said. "If left unchecked, this will distort private behaviour and inflate public costs."

The 2008-09 financial crisis in the United States and several major European economies "exposed the fallacy" that strong financial institutions would collectively act to ensure the soundness of the system for their own preservation."

 

http://www.cbc.ca/money/story/2010/06/10/carney-risk-reform.html

5 Replies
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Senior Contributor

Re: Call for Financial Reform

Probably a good Idea to be proactive and build up some reserves rather than get caught short. Pretty obvious no one thought the party would end in the US residential and commercial realestate market. Sorta of like the US farmland prices. Just another balloon in the late stages of expansion.
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Advisor

Re: Call for Financial Reform

First time I can recall Denninger alluding at all to the farm economy.

 

http://market-ticker.denninger.net/archives/2394-Fed-Z1-Blah.html

 

 

He hasn't missed much, big picture wise, since Sept. 08.

 

Note how casually he makes reference to "family farms".  I wonder at what size or model breakpoint he's making that distinction?

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Senior Contributor

Re: Call for Financial Reform 4wd

4wd, the Canadian leaders have been negative toward the insurance/reserve tax on financial institutions. They have argued that Canada's tough legislation and good oversight of that legislation kept Canada from having to help any troubled banks and a tax on Canadian financials would just penalize a system which is working in order to help other countries where the problems were.

They continue to push better regulation AND oversight of Financial institutions.

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Advisor

Re: Call for Financial Reform

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Senior Contributor

Re: Call for Financial Reform

Interesting read bruce.

So did I understand it correctly that the correct time to pay down the deficit is when times are 'good'?

I always find it interesting when I read posts on here about how liberals are spending all the money and conservatives would not.

In Canada it was the Liberal party that had surpluses that paid down the debt and the Conservative party that cut taxes just before the present economic troubles and so now are running hugh deficits (again).

Took time to read this article of  Krugman's too and found it interesting  http://www.nytimes.com/2010/05/17/opinion/17krugman.html?partner=rssnyt&emc=rss