Posted by Gilmour Poincaree on November 15, 2008

November 14, 2008 at 2:51 PM EST

by Steven Chase

Globe and Mail Update

WINNIPEG — Prime Minister Stephen Harper says he wants countries such as the United States to Prime Minister Stephen Harper - by Michael Nicoll Yahgulanaasagree to subject their financial systems to “peer review” by other countries – comments made as he heads to a key economic summit on tackling a global crisis triggered by an American banking and lending meltdown.

“I do think it’s incumbent on the United States and others – that as they make regulatory reforms – that we allow peer review mechanisms,” Mr. Harper told reporters in Winnipeg before leaving for the Group of 20 meetings in Washington, D.C.

“[There must be] allow accountable and transparent international peer review mechanisms of our financial systems: to give us evaluations and suggestions. Not to impose solutions – we want to respect national sovereignty – but that we get good objective evaluations that we are able to act on.”

He said however he remains opposed to any push for global governance of financial systems and believes those won’t gain traction in Washington.

“Our position is [not] one model of compulsory global governance that I think is unrealistic and will never be accepted. But I think on the other hand if we’re going to work on this together, there has be some willingness to be transparent and open to peer review,” Mr. Harper said.

The Prime Minister noted that Canada has previously submitted to international reviews of its financial system and it has been helpful. Canada, he noted, has been praised by the International Monetary Fund as having the soundest financial system in the world right now.

“We have received comments [from past reviews]. Those comments and criticisms have been helpful in making reforms. And we think that’s a reasonable part of being part of a integrated global financial market.”

Mr. Harper said that Canada does not agree with the two extremes of debate heading into the G20 meetings.

He said some countries are isolationist on reforms and believe they “should strictly keep their own house in order and that’s really their own national business” while others “are seeking wide ranging global governance of financial markets” to come from the meetings.

“I believe the government of Canada’s position is in neither of these camps. We actually believe that neither of these positions is feasible and realistic,” he said.

“First of all I don’t think the major economies of the world will obviously consent to have external control over their regulatory systems. But at the same time I think we do need – to the extent we have global capital flows – we do need something where all of us can give each other a significant reassurance about the nature of our system.”

Mr. Harper said he hopes the G20 meeting doesn’t get bogged down in a debate about how to restructure international organizations amid calls from some developing countries – also referred to as emerging market economies – for permanent seats at the table.

He said Canada’s open to giving emerging market economies more of a voice but said it’s a long-term discussion.

“What I hope though is that … we don’t get too lost in them at the meeting,” he said.

“I think quite frankly if we went to this meeting and ended up discussing – our discussions being dominated – by international economic institutional architecture, that would be equivalent to me meeting with the premiers last week and discussing the constitution as a solution to the economic problems.”




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