A financial omnibus bill every year

A financial omnibus bill every year
A financial omnibus bill every year

Only one omnibus bill dealing with financial matters would have been carried out during the previous mandate of the Legault government, indicated Éric Girard at the opening of the 17e Meeting of the Autorité des marchés financiers (AMF), which was held on November 22 in Montreal. He felt that was not enough.

“We have a fiscal and budgetary omnibus every year. We should also have a financial omnibus to keep the laws up to date and watch what is happening in the industry,” the finance minister said.

“I am committed to trying to have one financial omnibus (bill) per year. We’re gonna take what’s important to you and we’re gonna execute it. The changes will come from you. You are the specialists,” he told the audience of industry professionals.

The Minister of Finance admitted, however, that the cooperation of the opposition parties was necessary, because the adoption of such a bill can take time in parliamentary committee.

A relevant update of the legislation in order to take into account technological advances in the sector of financial products and services is generally desirable. Let us recall the difficult adoption in 2018 of Bill 141, which modernized the framework of the financial sector, among other things because of its large number of adjustments and the dispute surrounding the integration of the Chambre de la sécurité financière (CSF ) to the AMF. The parliamentarians finally withdrew the articles of law that would have allowed the AMF to “swallow” the CSF.

An economic downturn

Asked by Louis Morisset, president and CEO of the AMF, about the probability of a recession, the former treasurer at the National Bank preferred to speak out for a “slowdown in the economy”.

“There is a 100% chance that the economy will slow down due to the exceptional growth it has experienced in 2021 and the first quarter of 2022. Growth will be practically zero between the 2e and 3e trimester. We could even have two consecutive negative quarters,” he said.

He predicts that inflation will come down “gently” in 2023. “The prices of commodities, energy, raw materials and goods are falling. All indicators show that inflation will slow down,” he said.

The increase in interest rates, which is currently affecting the residential real estate sector, could also affect companies that have variable rate revolving financing. The government could take steps to support them if needed. “We are here to help Quebecers, in case inflation causes liquidity problems for businesses. »

Disclosure of SAEs

The Minister of Finance also highlighted the progress made following the work of the G20 Finance group following the 2007-2008 financial crisis.

“The G20 Financial Stability Group has required financial institutions to disclose their liquidity and capital position in a much more transparent manner. Today, we can measure this information more accurately. »

This transparency has forced financial institutions to have more liquidity and capital, therefore more financial stability,” he added. He is of the opinion that the industry should apply this same level of disclosure of information with respect to climate risks.

“I would like to see climate risk disclosure bring financial institutions into a race where they are more transparent. This will make it easier to get the facts about the added value of a private company and its contribution to global warming, and this will encourage them to do more,” indicated Éric Girard.

Role of fintechs

During his years at National Bank, Éric Girard had the opportunity to observe the consolidation movement in the industry from the inside. “At the time, we counted on the big guys to have a social responsibility, to inform and educate. The arrival of fintechs, of several smaller players who want to eat away market share in the niche sectors of the big players, has changed the situation, bringing new risks.

The challenge for the industry in the coming years is to encourage competition while ensuring the promotion of financial literacy in order to provide “quality information and non-negotiable ethics”, pointed out the Minister.

He told the anecdote that he asked his daughter in her twenties how young people learn about finance. She allegedly replied that the young people did not talk about money among themselves. This response challenged the dad and Minister of Finance, who recalled that specialists have the responsibility to popularize finance and the economy for generations to come.

The article is in French

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