There is a lot of confusing, complicated talk about banks and regulations, but I’ve boiled it down to this.
We need to look at what Canada did right: it was the only G7 country to survive the financial crisis without a state bail-out for its financial sector. It has an uncomplicated and well co-ordinated regulatory framework, with capital requirements at its core.
Banking systems should be based, as the Canadian system is, on principles rather than the rules.
These must be bold, simple, transparent and verifiable. They must be easy to understand and possible to enforce.
It is key that financial institutions retain risk.
Regulations are required as throughout history it has been proven, give a banker an inch, he (it usually has been) will take a mile.