Not just tough banking rules, but tough referees, too - Macleans.ca
 

Not just tough banking rules, but tough referees, too


 

A nearly final version of the G20 communiqué includes a commitment to combine a new rule book for banks, which won’t be finalized until late this year, with tougher supervision to make sure those rules are actually followed.

The bland-sounding pledge—”We agree that new, stronger rules must be complemented with more effective oversight and supervision”—actually reflects a key Canadian push based on experience in this country about what actually works.

The G20 agrees that reforms should be adopted to “strengthen oversight and supervision, specifically relating to the mandate, capacity and resourcing of supervisors and specific powers which should be adopted to proactively indentify and address risks, including early intervention.”

That means banking supervisors should be given the authority to step in and force banks to change they risky ways even before they clearly break rules. This was the approach pioneered in Canada in the 1990s by John Palmer, the former Superintendent of Financial Institutions, and promoted these days by his successor, Julie Dickson.

“The rules are important,” Dickson has said, “but ultimately it is the referees that control the flow of the game.” (Apt phrasing for a G20 during which the journalists, at least, have followed the summit with one eye on the FIFA World Cup.)


 

Not just tough banking rules, but tough referees, too

  1. It requires one global authority for it to work. 200 countries, 1 standard, 1 authority.

  2. Not bad for a guy who's constantly being attacked, by the usual suspects, for letting Canada's leadership standing fall in the world. Didn't Canada basically get what it wanted from these two global summits? And isn't that global leadership? Just asking.

    • No Dennis, absolutely nothing was accomplished at these summits.

      Other than massive damage in Toronto that is.

    • You're right Dennis. Harper hasn't done anything I'm ashamed about here, and I'm even proud of him for getting all this agreement on the key points (no bank tax, regulation, oversight).

      My only problem continues to be where he decided to hold the thing–in the middle of an unsecure city, thus causing the security bill to hit the roof. I am pleased to note that it now isn't a complete waste of money–we did get what we wanted–I just think we could have done so more cheaply.

      • Well, my understanding is that a G20 summit is essentially too large to be held in a place like Muskoka. So, I suppose the question then becomes this: Can you hold joint summits like we saw this weekend in a remote location somewhere?

        For the record, I like the ideal of joint summits. Apart from the security, I thought Canada came away pretty good from the experience.

        • LOL yes, apart from the $1.2B worthless security…..!

          • I read this talking point of yours the first time. Got it!

          • Obviously you didn't.

            Harper wasted a ton of money on nothing.

          • Which you stated three posts ago, and countless more times no doubt! Thanks for showing up.

          • Here's a hint…you're going to hear a lot more about the whole weekend being a waste of money, so get used to it.

          • We know that's your talking point. Are you shooting for stating it more than a dozen times in this thread?

          • Well, you keep asking to hear it again….since you've lost all memory of the actual topic.

        • What was wrong with Exhibition place? It is already a contained area and would have been much easier to secure. While there isn't any hotels in the 'zone', don't you think it would be nice for the leaders to get together and sort of high-class bunk it? Okay, I think that would have been so cool! Of course they couldn't put sleeping bags on the floor or anything, and I'm sure they'd have to have privacy, but I think temporary measures could have been employed at less cost than the difference in security costs. Really, I just think it would have been cool for them all to sleep kind of together–like camping!

          • Montebello. Jasper Park Lodge. Whistler. Yellowknife. Churchill MB. Huntsville and two or three surrounding communities. Thunder Bay. Val d'Or. Goose Bay. Or my favourite, the (abandoned?) military base next to the Iqaluit Airport, following a refurb job.

            Heck, have communities "bid" for the next one to come around, highlighting why venue / accommodation / security would BEST be achieved at their own location.

          • Detour lake is an abandoned Diamond mining complex north of Cochrane, already furbished with reasonable accommodations, already has security check points and fencing like a top security military base, one of so many location in Canada that would have been ideal for the Summits.

          • Great! Let's well and truly have a bidding process when the G8 comes back to Canada.

            Even an "active" mining or other industrial complex might like to give everyone a week's holiday and turn the keys of the complex over, for the right fee, to conference organizers.

          • Again, it wasn't the G8 that was held in Toronto. As the argument goes, it's the G20 needs to be held at a larger location.

          • Come on, Dennis. If the G8 were in Toronto, too, there would have just been a couple more days of idiotic violence by these nutsos.

            The G8 and the G20 should be in precisely the same spot, one after th'other, to avoid barricades and security sweeps in two different locales. And the downtown of a major city is just stupid, given the stupidity it obviously attracts.

            If you rub honey all over yourself before going for a stroll in bear country to pet the cute widdle cubs, feel free to blame the mama bear when you get mauled. The park warden will indeed have to shoot the one that carved you up, but he will spare a sideways glance at your corpse for your less-than-brilliant decision making.

          • a) Isn't violence at G20 routine, which is why we need all that security — no matter where it's held?

            b) I'm not a big fan of essentially declaring moral victory for the thugs. They caused some damage, but so what?

          • Again the point of holding it in the middle of nowhere is that a) only the one building holding the dignitaries needs protection and b) there's less ground for protestation and no valuables to be protected.

          • And, again, I know that G8 summits, including this one, are often held in such remote locations. Yet nobody here has cited examples of a G20 held on Mt. Olympus.

            It's easy to throw eggs, isn't it.

          • Throwing eggs, eh? Arguments that reflect the realities of actual events are now egg throws?

            You are arguing the damage is no big deal and we should plan for trouble rather than plan around it. You do your argument a disservice when you childishly brandish "egg throwers" against those who point out there are saner ways to plan for inevitabilities by planning around them.

          • OK. Then how about responding to my main points instead of, well, throwing eggs at me?

            Hard to hold G20's in remote locations. No one has really responded to that. Hard to maintain no violence at these events. No one has really responded to that either.

          • Hard to hold G20's in remote locations. No one has really responded to that.

            Hard, yes. Impossible, no. Heck, put up big circus tents at Goose Bay, for all I care.

            Hard to maintain no violence at these events. No one has really responded to that either.

            Then try to re-read, some. It is precisely because there are going to be these idiots that you put the venue away from a major urban downtown. Unless you want to adopt the principled stance that "this is Canada so we're different and we should be able to peacefully close down whatever city we want, and tsk-tsk look what those silly people did to ruin our party."

          • I'll ask yet again: Has a G20 event ever been held at a remote location? If not, why not? Geez.

            This isn't a family picnic. It's a major international conference involving the world's largest economies.

            Again, a lot of egg throwing after the fact, without substantive suggestions of alternatives other than to shove world leaders in a circus tent at Whistler.

          • For the record, I thought paralyzing downtown T.O. was a dumb idea even before it happened.

            Whistler has nice hotels. I said Goose Bay might need the circus tents. Just sayin'.

          • But I haven't heard any substantive or realistic alternatives.

            It just seems to me, for various reasons, that some people just want to throw eggs at these conferences – perhaps because it was Harper who held them.

          • Harper holding it in no way reflects why I am heaping scorn here. Travel through any random page of my I.D. comments if you need supporting evidence. OK, except maybe the page that has me calling him a jackass for slamming down a free press in Canada for the diplomatic stroking of the Chinese president. And maybe the page or twenty where I am less than thrilled about his spendapalooza temporary (god I hope temporary) insanity.

          • Oh, so you only heap scorn on him on just about every other topic. Gotchya.

          • Nope. Only when he does things with which I disagree. He just happens to be doing more and more of that in recent months.

          • Colour me skeptical.

          • Well, I can't help you any further because I will not read back to you my hundreds of comments over the last couple of years. If you care (and I will not be hurt to learn that you do not), you can click for yourself.

            But there will no doubt be a few longtime Blog Central observers who will be quite amused that MYL has been accused of being some rabid anti-Harper.

          • My experience with you is much different.

          • Ahhhhh, yes. YOU're the guy who smugly kept insisting that Oliphant's respecting the prohibition against using the word "perjury" while accusing Mulroney of perjury was somehow proof that Mulroney's reputation escaped unscathed. You gamely kept at it for quite awhile, too.

            Which, I suppose, explains why you keep saying no one is suggesting a suitable smaller-town venue for G20 even though many (well, ok, I) keep on giving suggestions. Excuse me: no one is giving credible suggestions (in the all-knowing judgment of yourself). Forgive my memory lapse. Things are now much clearer. I should have surrendered to you the last word long ago, had I figured out how this merry-go-round was gonna go. Good day.

          • Oh brother! Here you are suggesting that you're not partisan or ideological, then you finally come out and show your partisan and ideological stripes! I love it! lol

            Needless to say, those aren't my positions. You haven't given any substantive suggestions for alternative g20 sites. I'm sorry, but a circus tent won't do. Didn't realize you were serious about that.

            Thanks for showing up.

          • "how about responding to my main points instead" "But I haven't heard any substantive or realistic alternatives."

            Oh for cryin' out loud, do you have the attention span of a goldfish or something?

            8 posts up – "Again the point of holding it in the middle of nowhere is that a) only the one building holding the dignitaries needs protection and b) there's less ground for protestation and no valuables to be protected."

            13 posts up – "Detour lake is an abandoned Diamond mining complex north of Cochrane, already furbished with reasonable accommodations, already has security check points and fencing like a top security military base, one of so many location in Canada that would have been ideal for the Summits."

            There. Questions answered. Suggestions given. All in one post. Try playing stupid and dodging that one.

          • Yes, and I've already said that a circus tent is hardly a venue for 20 heads of states and their dignitaries.

            People are pulling these "venues" out of their hats.

            Like I said, a bunch of egg-throwing.

            And calm down. I realize that politics is like a religion to some, but really.

          • THIS IS CANADA!!! WHY MUST WE LIVE IN FEAR OF BEARS!!!! WE MUST HOLD ALL THE HONEY-SAOKED SUMMITS IN THE MIDDLE OF THE FOREST TO SHOW THAT WE WILL NOT COWER BEFORE THE URSINE THREAT!!!

          • You first. I admire your rugged respect of your core principle. The bears will admire your core. Let us know how it turns out.

          • All those locations are capable of accommodating the larger G20? I have my doubts.

          • How big exactly is the G20? With the 20 leaders and handful of staff that follows them?

          • What are you going to do, stuff 'em all in a closet?

          • Don't be obtuse. Your argument is that it would be too hard to hold this event for logistical reasons. you've insinuated once that the G20 had over 20,000 people attending and twice that it had over 15,000. That's a grossly exaggerated number. At most the actual event has 20 attendees. With the visiting staffers the number maybe gets to about 100. Add concierges, bellhops, and whatever and we may be talking about 200. Using the Whistler G8 summit as a reference then 500 security guards will be needed.

            We're currently building a 1200 person housing complex meant to last 20 years in the middle of a swamp with 60 miles of gravel road to get there. That's hard, but it's still not 1.2 billion$ hard. Sprucing up an already built location off a paved road in isolation is no where near as hard as this.

          • Where in the world did I ever come even close to suggesting numbers like that? What in the world are you talking about? I suggest you post with less anger, and with more sober thought. Then you might get some facts straight, for crying out loud.

        • The TV is reporting tonight that Obama told Harper that he believes G20 meetings need to be held in a large city for logistical reasons. At least one influential world leader thinks it was right to hold the meeting in Toronto.

  3. It will be called "The Paul Martin Approach"

  4. I think we should get over the fiction of the overweening wonderfulness of the Canadian banking
    system. The guys made every effort to get in on the mortgage games that led to the housing bubble.
    And they actually did for a short time. But being the dynamic and ambitious souls that they are, they
    got in the door just as it became glaringly obvious even to those would not see that the implosion
    was straight ahead. They (and we ) were lucky.

    • 1. Canada's success goes beyond this crisis. Canada has essentially had no major bank failures since the 19th century. This is a period that includes the Great Depression.
      2. Any financial system needs institutions willing to take risks. There was a time when Microsoft was a risky investment, or Ford (and neither would have been successful without the abiltiy to raise capital). Subprime mortgages are only different in that they were a risk that did not pan out. Any financial system must balance risk and the prospects of growth – zero risk tends to equate with zero growth.

  5. Oversight recommendations are fine and dandy, but the Canadian experience comes from a unique context. Our banking sector is among the most concentrated in the world. Oversight is really difficult when you have a decentralized system like that in the US – and even moreso with the rise of shadow banking (institutions that act like banks but aren't).