U.S. bank reform violates NAFTA, Joe Oliver says

Finance Minister calls for changes to ‘Volcker rule’, aimed at reducing high-risk trading bets by banks

NEW YORK, N.Y. – Canada’s finance minister says sweeping American bank reforms introduced in the aftermath of the financial crisis violate the North American Free Trade Agreement.

In prepared remarks of a speech delivered Wednesday in New York City, Joe Oliver calls on the U.S. government to change the policy known as the “Volcker rule.”

The Volcker rule, adopted in 2010 but has yet to be fully implemented, aims to reduce high-risk trading bets by big banks.

Unless special exemptions are made, however, Oliver said U.S. investors will be at a disadvantage because they won’t be permitted to trade in Canadian government debt.

“I believe — with strong legal basis — that this rule violates the terms of the NAFTA agreement,” said Oliver’s speech, delivered at an event hosted by the Securities Industry and Financial Markets Association.

“I hope the United States administration sees that changing the Volcker rule is in its own best interests and that of its biggest trading partner.”

In recent years, senior Canadian officials — including former finance minister Jim Flaherty and former Bank of Canada governor Mark Carney — warned the U.S. government about the Volcker rule’s wide-reaching impacts.

Oliver said Americans should have no concerns about Canada’s credit standing since its rating is better than that of the U.S. government.

A spokeswoman for Oliver’s office said the minister has personally raised his concerns over the Volcker rule in past meetings with Treasury Secretary Jacob Lew.

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