According to the federal budget announced yesterday (see page 130), the federal government intends to amend the Bank Act to create an explicit regulation-making authority for banks in regards to over-the-counter derivatives. The amendments will facilitate the integration and consolidation of OTC derivatives regulations with the proposed federal-Ontario-B.C. cooperative capital markets regulator. It will also make it easier for foreign regulators, who apply a rules based system of oversight, to assess the Canadian principles-based regulatory framework in their equivalency determinations, which will benefit Canadian banks when transacting with foreign counterparties.
The precise nature of the amendments is not yet known.
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