Canada's Banking System a model for others: Harper

TAVIA GRANT Globe and Mail Update November 6, 2008 at 3:38 PM EST

TORONTO - Canada's financial system, which is weathering the economic storm better than most countries, could serve as a model for other nations, Prime Minister Stephen Harper said Thursday.

"We certainly have not avoided all of the pitfalls that have occurred in other countries, but they've been much more limited," he said after a meeting in Toronto.

His remarks come ahead of a summit of G-20 leaders next week in Washington to discuss the financial crisis.

He attributed Canada's relative strength to "a broad and developed system of financial regulations" as well as fiscal and monetary policies. "We have entered this period from a good position," he said. "At the same time, we're in a position where we're important players - people will listen to us - but not so important that they're worried we have an alternative agenda."

Mr. Harper said he hopes to focus on "selective" improvements to the global regulatory system that will strengthen oversight, rather than a more radical overhaul suggested by several European leaders.

Mr. Harper is in Toronto to meet with economists and senior financial executives to discuss the slowing Canadian economy and the global financial crisis.

He met this morning with economists at the C.D. Howe Institute's monetary policy council.

Anyone unsure of the European central banks' reasoning needed only to look to Washington, where the International Monetary Fund cut its month-old forecast for global economic growth next year to 2.2 per cent from 3 per cent, adding that of the world's major industrialized countries, only Canada's economy will grow in 2009.

But their actions are loosening credit markets, suggesting the global economy will show signs of life by the later half of next year, said Stéfane Marion, economist at National Bank Financial.

"We are going into a global convergence of very low interest rates," Mr. Marion said from Montreal.

"They aren't done in continental Europe. They aren't done in the U.K."

With files from Bloomberg News