Thank you, Mr. Chair.
Mr. Rudin, in your presentation, you spoke at length about bank ratios. You stated that capital requirements for financial institutions in Canada is 20 to 1, which is a very good ratio compared to the multiples of the banking institutions in the United States and in Europe, which are in the 30s, 40s and 50s.
Why is the cap on leverage for our Canadian banks so good? Is it due to Canadian regulation, or the Canadian market? How is it that a European bank can have a ratio as high as 50 to 1? How can you explain such large spreads in ratios? I was under the impression that international regulations on capital requirements applied to all financial institutions in the world. Yet, the ratios vary. There has been much talk about the Basel agreement, for banks that regulate the banking system. Should banks not be held to a minimum ratio internationally?
I would like you to provide me with explanations regarding the asset-to-capital multiples.