In terms of the first part of the question, when I was overseas with an investment banking firm, my work was principally with sovereign governments, particularly emerging markets as they really emerged. For example, there was South Africa, when the ANC came to power and they were doing their first financings, Korea, and other nations like that. I didn't really touch on Canada until I came back to Canada. So the short answer is no, I did not hear about that issue.
The broader issue, though--which is an important one and one close to the heart of the Bank of Canada--is how we enhance the competitiveness and efficiency of our capital markets.
There are things we can definitely do, and I'll start with what the bank can do. It starts with making sure we have an efficient fixed-income market, starting in money markets.
We talked a bit about the potential facility and what that role would be, but we must make sure we conduct our core oversight responsibilities for the payment system. That's important for the money market. We act as agent for the government in federal government debt. The consolidation of government debt, of some of the crowns into government debt, has been a success. We need to get the right level of liquidity there.
I think we need--and this is beyond our responsibility because the market has to do this--securitization to continue in this market. Securitization is under real pressure, and rightly so, because some products have become too complex, but it should shrink down to a core of more standardized products, which can really enhance the efficiency of markets.
We have to strengthen market integrity. Governance is an aspect, but better enforcement is absolutely crucial. I'd recommend the report of Nick Le Pan on IMETs and the role of the RCMP. But an important aspect here is that this is a shared responsibility. So it's not just the RCMP; it's provincial, it's crown prosecutors, it's provincial securities commissions. We'll do what we can to help.
I'd like to make my last three points.
One is about value, openness, and competition. The foreign property rule was removed in 2005. That opened up a lot of exciting markets for our investors abroad. That's important for our retirements. But it also created markets, such as the Maple bond market in Canada. This idea of having the Toronto Stock Exchange push free trade and securities is again the type of thing that can improve competition in Canada. We'll get better results if we have more competition. That's the basic point.
On regulation, my personal view is that I see a value to proportionate regulation, respecting different sizes of companies, different requirements for different sizes of companies, principle-based regulation. And I'll say one lesson to take from what happened in the summer is that people will come up with fancy new financial products. They will be very complex. The next turmoil--to use the official term for what happened--won't look like the last one. There will be different products. If you have principles, you can guide the conduct of those products, but if you have rules, people will get around them. And that's the experience of the market.
Last is investor education, but it's five o'clock and I won't be able to get into that.
