International Monetary Fund chief Christine Lagarde (above), the former French finance minister (and first female, one might note, to hold the position of finance minister in any G8 country, including Canada), was in Toronto this evening where, among other things, she thanked Canadians for lending the world the “wise counsel” of Bank of Canada Governor Mark Carney (he is doing double duty as bank governor and as chair of the G20′s Financial Stability Board) and then almost certainly put herself on Prime Minister Stephen Harper’s Christmas Card list by not only praising the country’s financial record but using a hockey analogy to do so!
It is fitting to discuss these topics in Canada, a country with one of the strongest financial sectors in the world. While it faces its own challenges, there are important lessons that Canada can teach the rest of the world about how to build a stronger, safer financial system.As policymakers, we must push through reforms today to create the system we need for the future. To quote your most famous hockey player―Wayne Gretzky: “A good hockey player plays where the puck is. A great hockey player plays where the puck is going to be”.
Read the whole speech here: Global Financial Sector Reform: An Unfinished Agenda by ChristineLagarde, Managing Director, International Monetary Fund. (They spelled Gretzky on the IMF site as Gretsky but who’s counting?)
There were other bits which I swear could have been written by the PMO, by Minister Flaherty’s officer or, perhaps, by someone at the Bank of Canada (and,yes, I know who most of you anonymous speechwriters are!). Consider this from Lagarde:
The IMF has also played a central role in the development of new approaches to identifying and managing “big picture” risks, what we now call macroprudential policies. These are system-wide risks related to the economic cycle, market structures, and to individual institutions.
Canada has been a leader in this area, implementing macroprudential policies to rein in the build-up of household debt, such as lowering debt service-to-income ratios and increasing down payments on new mortgages.
All of these new reforms comprise the tools so far that will help us shape the future financial system. We must shape the system so it cannot again hold us ransom to the consequences of its failings. As Marshall McLuhan said, “We shape the tools, then the tools shape us”
She didn’t stop there:
A robust recovery will only last if supported by resilient institutions and markets. Indeed, let us not forget the end goal here: a safe financial system to support sustainable growth. Moreover, there is simply no alternative: the costs of crisis are so much higher than the costs of building a more stable system.
This is a truly global challenge, one well suited to tonight’s celebration of “globalism”. It is also a fitting topic to discuss here in Canada, with its history and culture of multilateralism.
You can speak with credibility based on your own financial sector success, but you are also regarded as a leading multilateralist. Abroad, Canada is identified by its values of coordina-tion and consensus building, which have given your country influence beyond its years.
Thanks, Mme Lagarde! Come back anytime!
(Lagarde photo: Reuters/Stephen Jaffe)