I had been thinking about this a lot recently. Some of the more right wing people I read from the States have been arguing that this crisis does not mean that the markets need to be regulated. While I have tended to agree with this I’ve often wondered about what regulations mean. Then I read this article from the Globe and Mail and could not help but think maybe I’m wrong.
Former central bank governor David Dodge agrees. Canadian bank executives keenly remember that period, “and there was therefore perhaps a degree of prudence, a lack of aggressiveness, in comparison with major banks around the world,” he said.
And he gives top marks to the Office of the Superintendent of Financial Institutions, Canada’s banking regulator, for being more conservative than those in the U.S. or Britain. “I think that, from a regulatory point of view, you can say that the Canadian banks were more appropriately regulated.” (Emphasis mine)
The idea of the free market only really makes sense if you do not have powerhouses, like the American banks, that can manipulate the system. When it comes to corporations or the Government having controls I’ll choose the Government; at least when they screw up the little guys can fire them.