Finance committee  I didn't mean to lay it all on the Congress. What I meant was, that was where it started because they are the referees. They have to set the regulatory framework. However, Fannie and Freddie then made some absolutely colossal errors. They are bankrupt; they were bought and nation

Finance committee  I should have said this in my earlier response. I believe it's in the self-interest of every region. It's in the self-interest of every Canadian that we have a single national regulator because it will insure much greater safety of financial investments and financial securities.

Finance committee  Certainly, I've always advocated transparency. To use the technical jargon, financial markets are more efficient when there is more disclosure of information because consumers can then make informed choices. In terms of vehicles, such as structured investment vehicles and deriva

Finance committee  No, I don't think so. I'm sorry. There is in fact a real criticism of how some wealthy people in the U.S. took everybody for a ride. But most of the CEOs with these huge bonuses have lost money because they thought the system was going to keep on going.

Finance committee  It's certainly going to include investment banks. It's certainly going to include hedge funds, the regulation of credit swaps, derivatives. There are all kinds of proposals being put forward in the States and in England. I think they're going to end up looking more like banks. We

Finance committee  I guess I don't really see that as a problem, and I'll explain why. There hasn't been a lack of access to consumer credit. Unfortunately, I didn't put the slide in showing the indebtedness of consumers in Canada and the United States. They are wildly overleveraged. The problem is

Finance committee  That's only because they're recapitalizing because of this extraordinary financial crisis. The losses are going to continue to rise. I was in the bank in the 1980-81 recession when Volcker was the chair of the Federal Reserve Bank, when people were losing their houses because the

Finance committee  It may. It really depends on whether you, the parliamentarians, regulate the shadow banking. Right now they're not regulated, so they are not subject to the reserve requirements. Therefore, they can be more leveraged and make higher profits in good times--but then we saw what hap

Finance committee  Indeed. I put that in because the British just released their proposal for reregulating financial services two days ago. They came out quite strongly against a raw metric. I haven't talked about this in my slides, but although the American banking situation is in very bad shape,

Finance committee  I think the impact would be far less severe in Canada than in the United States. Again, I will come back to my comments about the prudential nature of Canadian banking. And this isn't meant to be any kind of propaganda, as I don't have any relationship to the banks any longer. I

Finance committee  I've never bought the argument, although in the absence of any hard evidence it's difficult to say. From the banks' perspective, they're going to charge more if they get into car leasing because they're not doing it to provide incentives to the consumer to buy a car. They're doi

Finance committee  We're getting into an area called business valuation. It's a course we actually offer in my MBA program. It's a very tactical area because there are different methodologies to measure. There's replacement value, there's historic cost, there's market, and so forth. I am not a pr

Finance committee  No, I don't support the elimination of mark-to-market accounting. It has been supported by all the major accounting bodies in the western world; FASB in the United States and CICA in Canada support it. It simply argues that assets should be valued at market value, not historic va

Finance committee  Currently that's precisely the point. At this moment the American price for a lot of these toxic assets cannot be established. In other words, we have what I would characterize as temporary market failure.

Finance committee  Okay. I want to, if you will, correct you. I did not say it was due to the SEC; I said it was due to Congress, who failed, in fact encouraged, Fannie and Freddie to go over the cliff in making mortgages that should never have been made. But in terms of the larger issue, Paul Kr