Madam Speaker, the hon. member has raised a number of very serious issues on the world scene, each of which represents a separate debate.
One very important issue to which he referred was the reform of the monetary system. World finances have a great bearing on conflicts which erupt in various countries. It is not the only reason, and we certainly acknowledge that. However, the monetary system in our world is very important. With his indulgence and with the indulgence of the House I will dwell on the monetary system rather than try to make an omnibus contribution to this debate. I want to zero in on that one very important area.
The international agenda recently has been saturated with initiatives of crises prevention, more effective management of international financial crises and more sustainable economic development. What started as a G-7 plan of action is now being echoed by the nations of APEC, the primary international organization for promoting open trade and economic co-operation among 21 member countries around the Pacific rim, which will be discussed later this month at spring meetings of the IMF and the World Bank, and in June at the G-7 summit.
There is a groundswell of support for strengthening domestic and international financial institutions and for economies that are more resilient to economic and financial crises when they do occur. Canada is committed to strengthening the international financial system and the world economy. We started this at the G-7 summit in Halifax in 1995.
Last year, in the wake of the Asian financial crisis, Canada proposed a six-point plan aimed at helping to sustain global growth while at the same time reducing the risk of future financial crises.
We call for ensuring appropriate monetary policy through G-7 central banks, paying close attention and giving appropriate weight to the risk of a further slowdown in the global economy; expeditious action to strengthen national financial systems and international oversight; development of a practical guide or road map for safe capital liberalization in developing countries; agreement to work urgently toward a better mechanism to involve private sector investors in the resolution of financial crises, including the possibility of an emergency standstill clause; and greater attention to the needs of the poorest countries to ensure they receive the resources and support they need to reduce poverty and begin growing.
At the G-7 summit in Birmingham in May last year, leaders accelerated work begun in the 1995 Halifax summit on strengthening the international financial architecture to help prevent and better manage financial crises. Key elements of these efforts include: reports of the three G-22 working parties, improving transparency and accountability, strengthening national financial systems and addressing international financial crises delivered at the G-22 meeting October 5, 1998; the G-7 leaders statement on the world economy issued October 30, 1998 together with the declaration of G-7 finance ministers and central bank governors; the plan for implementing reforms to the global financial architecture presented by G-7 finance ministers to heads in December 1998; the February 20, 1999 communique of G-7 finance ministers and central bank governors; the February 1999 Tietmeyer report to G-7 finance ministers and central bank governors on international co-operation and co-ordination in the area of financial market supervision and surveillance, and its proposal for the establishment of a financial stability forum to provide a mechanism for co-ordination and exchange of views among financial sector regulators and supervisors; the first meeting of the financial stability forum on April 13; and two seminars, one held on March 11 and the other to be held on April 25, 1999, involving 33 industrial countries and emerging markets to discuss outstanding issues in the international financial architecture.
Priority areas for strengthening the international architecture outlined in the October 1998 leaders statement on the world economy include greater transparency and openness in financial systems, better processes for monitoring and promoting international financial stability and improvements in corporate governance, orderly capital account liberalization, private sector involvement in preventing and resolving future crises, protecting the most vulnerable in society, and improving the effectiveness of international financial institutions.
The latter includes a proposal for an enhanced IMF facility to provide a precautionary line of credit for countries pursuing strong IMF approved policies, accompanied by bilateral assistance on a case by case basis, and with appropriate private sector involvement. Much has already been accomplished in these areas.
Six areas were also identified in the October 1998 leaders statement as requiring further attention. These six priority areas form the basis for G-33 discussion in the international seminars held on March 11 and to be held on April 25. They include: examining the scope for strengthened prudential regulation in industrial countries; further strengthening prudential regulation and financial systems in emerging markets; considering the elements necessary for the maintenance of sustainable exchange rate regimes in emerging markets; developing new ways to respond to crises and promote greater participation by the private sector; assessing proposals for strengthening the IMF, and proposals for strengthening the interim and development committees of the IMF and World Bank; and minimizing the human cost of crises and protecting the most vulnerable.
Canada supports the six priority areas outlined in the October 1998 leaders statement as requiring further action and is committed to advancing work in these areas. In particular, Canadian objectives in discussions on reforming the international architecture are presently focused on ensuring that the substantive aspects of these discussions take place within a permanent process that is representative of the major participants in the international financial system, that measures to effectively involve the private sector in crisis resolution are established to attenuate imprudent lending, and that the social aspects of international financial crises are addressed.
Prospects for a successful conclusion of the substantive aspects of discussions on establishing a permanent process for addressing international financial issues will be enhanced if they take place within a process that represents the interests and points of view of the major participants in the international financial system, and is anchored within the governance structures of the IMF. For this reason, Canada is supportive of efforts to improve the functioning of the interim committee.
The G-22 working group on financial crises agreed on some mechanisms for enhancing private sector involvement in crisis prevention and resolution, including collective action clauses in bond contracts and contingent financial arrangements with the private sector. Canada attaches a high priority to moving ahead with their implementation and moving even further to address the incentives that lead to imprudent lending. Canadian proposals for greater private sector involvement in crisis prevention and resolution received general support at the March 11 seminar.
Canada is particularly concerned about the social impacts of financial instability. We welcome this opportunity to put forward Canada's position on the reform of these financial institutions.