Public Values

Regulate the markets for real

Canada the only G7 country with no federal regulatory agency for financial markets.

Conrad Black was charged in the US because it has tougher securities laws.January 15, 2009 — Canada needs a federal regulatory agency for financial markets. It's the only G7 country that doesn't have one.

But CUPE is concerned that a federal government-appointed panel's recommendations are the wrong solution for protecting pensioners, small investors and pension funds and for stopping white collar crime.

Inadequate regulation, deregulation and self-regulation of derivatives and financial markets are now widely acknowledged to be the main cause of the financial crisis, which is now affecting pension funds, pensioners and small investors.

And Canada has an abysmal record enforcing and prosecuting financial crime:

• Hollinger shareholders looking to recoup the money they felt Conrad Black had looted from the company charged him in the US because it has tougher securities laws.

• None of the perpetrators of the Bre-X fraud were ever convicted under Canadian law, even though the phoney gold mine cost investors - including major public employee pension funds like OMERS and OTPP - billions of dollars.

• The fraud trial of LiveEnt executives Garth Drabinsky and Myron Gottlieb - accused of defrauding investors of up to $500 million - heard closing arguments last week - seven years after police first laid charges.

And yet the final report of the Harper government's Expert panel on securities regulation proposes so-called "principles-based" regulation to solve the "serious shortcomings" of the securities regulation system.

Ironically, the North American derivatives market, which saw a massive growth in unregulated derivatives, especially credit default swaps, a major cause of the current financial crisis, is governed by principles-based regulation. . .

To read further. . .

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  Regulate financial markets for real, by, January 15 2009

Posted: January 15, 2009

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