The following are some of the key recommendations in each of the four major areas covered in the new policy framework for Canada's financial services sector.
Promoting Efficiency and Growth
The government is acting to provide greater structural flexibility for financial institutions to compete in the global marketplace. A regime to permit large mutual life insurance companies to demutualize is already in place.
The government will introduce:
A new definition of widely held ownership that allows strategic alliances and joint ventures with significant share exchanges.
A new holding company regime to provide greater structural flexibility.
A transparent bank merger review process with a formal mechanism for public input.
An examination of capital taxation policy with the provinces.
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Fostering Domestic Competition
The government is acting to increase the degree of competition in the domestic marketplace by:
- Encouraging new entrants with liberalized ownership rules and lower minimum capital requirements.
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- Facilitating the ability of the credit unions to compete by allowing a restructuring of their system.
Expanding access to the payments system to provide additional competition in deposit-like services.
Allowing foreign banks to offer services to businesses and individual consumers via branches, in addition to subsidiaries.
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Empowering and Protecting Consumers of Financial Services
The government is acting to provide better protection for consumers of financial
services with:
Measures to improve access to financial services regardless of income or place
of residence, including a standard low-cost account and a process to govern branch closures.
A Financial Consumer Agency to strengthen oversight of consumer protection measures and expand consumer education activities.
An independent Canadian Financial Services Ombudsman.
Measures to prevent coercive tied selling and improve the information consumers receive when purchasing services or making investments.
Public Accountability Statements for financial institutions to report on their contributions to the Canadian economy and society.
More and better statistics on and analysis of small and medium-sized business financing to provide a better understanding of their needs.
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Improving the Regulatory Environment
The government is acting to make sure that the regulatory environment responds to the evolution of the sector by:
Improving the governance of the payments system.
Reducing the reporting burden relating to Canada Deposit Insurance Corporation standards.
Providing the Superintendent of Financial Institutions with new powers to deal with the potential risks arising from increased competition.
Streamlining the Office of the Superintendent of Financial Institutions' regulatory approvals process.
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