Don’t let rules stifle growth, exiting Scotiabank CEO says
Advertisement
Read this article for free:
or
Already have an account? Log in here »
To continue reading, please subscribe:
Monthly Digital Subscription
$1 per week for 24 weeks*
- Enjoy unlimited reading on winnipegfreepress.com
- Read the E-Edition, our digital replica newspaper
- Access News Break, our award-winning app
- Play interactive puzzles
*Billed as $4.00 plus GST every four weeks. After 24 weeks, price increases to the regular rate of $19.00 plus GST every four weeks. Offer available to new and qualified returning subscribers only. Cancel any time.
Monthly Digital Subscription
$4.75/week*
- Enjoy unlimited reading on winnipegfreepress.com
- Read the E-Edition, our digital replica newspaper
- Access News Break, our award-winning app
- Play interactive puzzles
*Billed as $19 plus GST every four weeks. Cancel any time.
To continue reading, please subscribe:
Add Winnipeg Free Press access to your Brandon Sun subscription for only
$1 for the first 4 weeks*
*$1 will be added to your next bill. After your 4 weeks access is complete your rate will increase by $0.00 a X percent off the regular rate.
Read unlimited articles for free today:
or
Already have an account? Log in here »
Hey there, time traveller!
This article was published 06/09/2013 (4410 days ago), so information in it may no longer be current.
TORONTO — Scotiabank chief executive Rick Waugh says financial policymakers need to take a step back to ensure new regulations placed on the world’s banks don’t stifle economic growth.
The outgoing head of Canada’s most international bank issued the advice in a speech Thursday that called on banks to take on more responsibility for lending risks or for regulators to ease up on rules designed to prevent another massive failure of a financial institution.
Contrary to some people’s beliefs, banks need to take on “a certain level” of risk to help the global economy, Waugh said.
“We have to take risk,” he added in a media conference after his speech to the Economic Club of Canada. “You’re not performing your function in society and in the financial sectors if you don’t.”
Capital levels at Canadian banks are widely considered stronger than those in most of their international peers under the new Basel III rules that set out key measures of a bank’s health and ability to endure future economic downturns.
Basel III came in response to the financial crisis in 2007 and 2008, but the more strict regulations caused many of the world’s biggest banks to drastically change the way they operate and increase capital requirements.
“No amount of capital can save a poor bank,” Waugh countered. “(It takes) good management, risk assets and liquidity.”
He pointed to the failure of Lehman Brothers that went bankrupt even though it passed the leverage ratios that were required, which he said suggests a failure in risk management rather than in regulation.
“If you had regulated, I don’t think whatever rule they would’ve had at the time — or the rules they have today — would’ve necessarily caught it,” Waugh said.
“Somebody’s got to take the longer view,” he said. “We’ve got to get this dialogue (to) the policy-setters, and then the regulators will act accordingly.”
In his speech, Waugh said regulations are having a “transformational effect” on the industry that eclipses any of the existing market forces because some institutions are being forced to sell assets they can’t handle or exit some countries.
— The Canadian Press