Skip to content

Why struggle over regulations on financial industry

We are still reeling from the devastating impact of the global economic downturn with unemployment and declining living standards continuing to negatively affect our daily lives. The reason for this upheaval has been clear for a long time now: Round after round of deregulation in the finance sector allowed investment bankers and fund managers to play with the savings and dreams of millions of working people with a view to maximizing their profits, and in the end the system broke down. First European leaders, and now President Barack Obama of the United States have all been talking about the necessity of properly regulating the financial industry.

But what we have here in Alberta is just the opposite: As you may well have heard, Premier Ed Stelmach is challenging the authority of the federal government to bring new regulations to the financial industry on grounds that it is an area of provincial jurisdiction. And our provincial government is in good company in this endeavor: Quebec is also questioning the federal government’s authority to regulate financial industry.

It is easy to understand why Quebec is mounting this challenge, because separatism is always a significant vote getter in that province.

But the attitude of our provincial government in this matter really begs the question: Why?

If Mr. Stelmach and his cabinet colleagues and advisors are planning to turn our province to an investment paradise by protecting what they see as their prerogative to legislate liberally on regulations to attract investment, they should be reminded that they have not done very well in drawing a lot of oil and gas investment to Alberta. And a sizeable portion of the investment that did come has not turned out to be very stable.

One has to add to that the widely held belief that the financial industry in our province has not been regarded with a lot of respect.

We seem to have reached a stage whereby many fundamentals of the workings of the banking and financial systems all over the world are being seriously reviewed and questioned. At a time when money can be moved so easily around the world, the trend is in the direction of introducing more comprehensive -macro- regulations instead of those governing smaller –micro- markets.

One hopes that the Stelmach government will see someday, soon, that monetary, fiscal and financial matters should not be subject of turf wars, but areas of mutual understanding and cooperation involving all responsible authorities.