Canadians deserve homegrown banking regulation, not a stifling international regime

financialpost.com:

On Friday afternoon, when many Canadians were lost in weekend thoughts or already on their way to the cottage, Canada’s bank regulator — The Office of the Superintendent of Financial Institutions — announced it will delay for one year implementing the final elements of the Basel III accord.

Unlike the United States, the European Union and the United Kingdom — jurisdictions that all endured significant bank failures in the 2007-2008 financial crisis — Canada has been leading the implementation of Basel III at the cost of hundreds of millions of dollars to Canada’s banks, despite being the one jurisdiction that distinguished itself during the crisis for the stability of its financial system and the least likely to benefit from change.

Recall that Basel III is an accord devised by central bankers and bank regulators from 28 countries in the wake of the financial crisis that was published in 2010. It outlines new common capital rules that in theory should help avoid another disaster like the one in 2007-2008. The rules and methodologies behind them are complex — they involve significant technological investments and material changes to the way our banks measure, report and manage financial risk.

For Canadians, these changes impose an even more conservative framework on our chartered banks. It will reduce bank lending to consumers and businesses by an estimated nine per cent of nominal GDP. In short, the Basel III changes will de-bank many Canadians and businesses, forcing them to find credit from more expensive and less regulated financial service firms that operate outside the banking sector — or go without it altogether.

At a time when more than two million mortgages are expected by the Canada Mortgage and Housing