The Liberal Senate Forum


facebook Ideas Forum youtube flickr

Meet Senator

Wilfred Moore

The Hon. Wilfred P. Moore, Q.C., LL.D. Appointed to the Senate by the Rt. Honourable Jean Chrétien, Senator Wilfred P. Moore represents the province of Nova Scotia and the Senatorial Division of Stanhope St./South Shore. He has served in the Senate of Canada since September 26, 1996.

Statements & Hansard

Bank of Canada Act

More on...



Read the comments left on this page or add yours.
Statement made on 07 May 2009 by Senator Jerahmiel Grafstein (retired)

Hon. Jerahmiel S. Grafstein:

Honourable senators will recall that earlier this week His Honour referred to the point of order raised by Honourable Senator Nolin and said that the bill was suitable for continuation. I would like to continue second reading debate. I will try to be brief because I gave an extensive speech earlier.

I will conclude my comments on second reading on this very important bill, Bill S-230. I will explain the urgency attached to this bill.

To reiterate, the bill gives the Bank of Canada a new instrument of direct financial surveillance to credit rate closely and cost-effectively financial instruments and financial entities providing greater transparency to the investing public and to implement the Bank of Canada's proposed macro prudential approach to regulation. Mr. Carney, Governor of the Bank of Canada, has been a vociferous advocate of more power and more oversight for our financial system. Yesterday, at the meeting of our Banking Committee, he reiterated his concerns.

There are gaps in our financial oversight as well as weaknesses in the credit rating mechanisms available to the government, to regulatory agencies, and obviously to the financial sector itself. Many experts believe that one of the paramount and fundamental problems in our financial system, as well as others, that has cost both investors and taxpayers, has been the failure to appropriately apply risk analysis as well as transparency to so-called toxic financial instruments, financial organizations, business organizations, and most certainly to derivatives.

Tony Fell is an outstanding banker, a former chief executive of RBC Capital Markets and one of Canada's most outstanding bankers. I will quote from a statement that appeared on January 28, 2009, in the National Post. The article states that he, Tony Fell:

. . . is no great fan of financial engineering and innovation — a "disastrous" problem area. "The financial industry should get out of complex structured products," he declared, adding if a "security has more than two bells and one whistle, just say no." He railed against credit rating agencies — whose model is "broken" — and said central banks should "target, and rein in, overheated and speculative industry and market bubbles. . . ."

So said Tony Fell, one of Canada's greatest leaders of the banking community.

Under my chairmanship, together with my deputy chair, Senator Angus, who is here, the Senate Banking Committee agreed that it should launch a study on hedge funds and the related problems of leverage and opaque financial instruments. That study was never completed.

However, during the course of that study, I attended personally, with the assent and knowledge of Senator Angus, on each of the presidents of our chartered banks and asked them, in the summer of 2006, whether there is anything that the Banking Committee should be concerned about, having heard testimony in our committee from all the banks' risk managers — and I see Senator Angus nodding in affirmation — that there were no problems in the spring of 2006.

Senator Angus will again recall that we also heard from OSFI, which set off no alarm bells to the Banking Committee. By the fall of 2006, the Banking Committee was not alerted to any substantive problem in our financial sector. That evidence was wrong and, in retrospect, somewhat misleading.

Earlier, the Senate Banking Committee heard Warren Buffett, one of the world's leading investors, in private testimony before the committee, who opined on all these matters. He said the problems were undue leverage given by banks to hedge funds, unregulated hedge funds, and the failure to properly assess risk to complicated financial instruments that no one could understand or assess.

In retrospect, the finance ministers of the G20 at their summit on April 2, 2009, issued a declaration that I have tabled in the Senate for further debate. That will give honourable senators a greater context as to the importance of this bill.

I will draw a conclusion by quoting from the statement, indicating why time is of the essence. That statement was tabled this week. Senators can read it carefully. I have put it down as an inquiry.

I want to quote from the end of that statement. Remember, I am speaking of the finance ministers who, on April 2 in London, declared that 47 action plans had been put in place to solve the financial situation and to provide oversight; yet there has been no discussion about this in Parliament. The first time that this was drawn to the committee's attention — any committee's attention — was yesterday when Mr. Carney appeared before the Banking Committee. We have one report, the only one I could find, from the Lethbridge Herald today — you will find it in your press clippings — and it reads:

The government is currently examining options for reform, including formation of a committee involving the central bank and other regulators, such as the Office of Superintendent of Financial Institutions.

That is the first notice given to a committee of Parliament that substantive reforms are being done to our financial system without parliamentary oversight.

I should like to quote from the important commitment made by the Minister of Finance on behalf of Canada. This was the last statement. Senators can read it in Hansard, but I want to quote it for the purpose of this record. The statement is from all finance ministers and reads:

We have agreed on more effective oversight of the activities of Credit Rating Agencies, as they are essential market participants. In particular, we have agreed that:

All Credit Rating Agencies whose ratings are used for regulatory purposes should be subject to a regulatory oversight regime that includes registration. The regulatory oversight regime should be established by the end of 2009 —

— I repeat, by the end of 2009 —

— and should be consistent with the IOSCO Code of Conduct Fundamentals. IOSCO should coordinate full compliance.

The statement continues:

National authorities will enforce compliance and require changes to a rating agency's practices and procedures. . . .

I will not repeat the rest.

Honourable senators, we are left in a state of suspended animation. We know the government is forging ahead. We know that there are major reforms to our financial system, yet Parliament has been functus. The problem is intensified when we refer — and thank you to Senator Day for reminding us about this — to the budget implementation bill we passed so quickly in this place without any scrutiny of substance, which we are now doing retrospectively in some of the committees.

In that legislation, Division 6, entitled "Legislation Governing Financial Institutions," we have an extraordinary provision. I am referring to page 258 of Bill C-10 and proposed subsection 14 of section 973.2, "Orders to Exempt or Adapt." It states:

The Statutory Instruments Act does not apply to an order made under this section.

Honourable senators, this bill is riddled with exemption after exemption after exemption for the Bank of Canada, the result being that the regulations and regulatory regime they will be putting in place will not be given any oversight by the joint committee of regulatory oversight. Those senators who serve on that very important committee will have no parliamentary oversight — none.

What to do? What to do, honourable senators, is for you to support this measure.

I am not sure — nor can anyone in Parliament be sure, except the government and representatives of the government — what regulatory actions the federal government has taken with respect to credit rating agencies, even though they have committed to complete them by the end of this year and to report at the next meeting of ministers of finance.

We are not here to impede reform on this side; we are just here to fulfill our responsibilities to provide parliamentary oversight and a check and balance against the executive. Maybe they are wrong or maybe they are right; we just do not know.

The Government of Canada has agreed to submit a progress report at the next meeting of the ministers of finance and the central banks. We knew nothing about this until Mr. Carney appeared yesterday before the committee, despite the legislation, which did not receive adequate scrutiny.

Hopefully, this bill will be referred quickly to a committee — preferably the Banking Committee; if not, to Committee of the Whole — so that we can hear from the government and so that Parliament can have at least a glimpse of oversight on what is going on behind the scenes with respect to major measures of reform affecting our financial system.

All government leaders, ministers of finance and central bank governors have called for greater transparency in regulation oversight. In every speech, every prime minister, every leader and every minister has called for greater transparency. That is true, except as it applies to Parliament.

This bill, hopefully, will be a small measure to ensure there is debate and greater transparency in order to avoid future economic meltdowns such as we have witnessed in the last two years. I urge the Senate to refer it quickly to a committee. Time is of the essence. This is very important. Failing a committee being able to deal with this bill, we might refer it to Committee of the Whole because it has wide ramifications.

On the other side are experts, such as lawyers, people who have skilled knowledge of these matters. It is important for all senators to have an opportunity to opine on these matters and hopefully to facilitate what we all wish for, which is to have an improved, efficient, transparent, fair-minded economic and regulatory system, particularly in our financial sector, so it does not cost our investors and taxpayers more money. We are here to help. I hope we will urgently deal with this bill and refer it to committee.

Please click here to read the full text of this debate

Recent Statements from Liberal Senators

Business of the Senate

19 Jun, 2014 | By Senator Joan Fraser | Colleagues, I'm rising to speak on behalf of my leader, the Leader of the Opposition, Senator Cowan, who had to be in Halifax tonight on public business. I must tell you that when I called him to say we were going to be adjourning for the summer tonight, he was, I could tell, quite irritated, not because he wanted us all to go on working like galley slaves but because he had already written a speech that he wanted to give tomorrow morning.

Lighthouses as Irreplaceable Symbols of Maritime Heritage—Inquiry

19 Jun, 2014 | By Senator Jim Munson | Thank you, Your Honour, and my apologies to Senator Champagne.

Unequal Access to Justice—Inquiry

19 Jun, 2014 | By Senator Joan Fraser | Colleagues, I know that Senator Jaffer was preparing to close this debate but, before she did that, I just had to say how terribly important the subject she has raised is.

The Senate—Promoting and Defending Causes that Concern the Public Interest—Inquiry

19 Jun, 2014 | By Senator Jim Munson | Honourable senators, I am looking for a bit of love and empathy at this late hour because I do have a speech, but you have to understand that, in the interest of having dignified departures for our five senators this week, I gave up my time to make sure that we were able to celebrate the departures of Senator Buth, Senator Segal, Senator Callbeck, Senator Dallaire and Senator Champagne.

Study on Status of Canada's International Security and Defence Relations

19 Jun, 2014 | By Senator Grant Mitchell | So, you thought you weren't going to hear from me? Well, I fooled you! So there! I rise in support of this report by the Defence Committee recommending that Canada become involved in ballistic missile defence with NORAD. I congratulate Senator Lang and other members of the committee for what I think was great collaborative work, completely non-partisan, very extensive and detailed with intense research.
« 1 2 3 4 5  ... » 

You can retrieve this page at:
Please recycle this document.