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OTTAWA - Canada is launching a full-court press in an attempt to prevent the United States from passing new bank reforms that may impact Canadian investors, financial markets and the economy.
In separate letters to Washington policy-makers, Finance Minister Jim Flaherty and Bank of Canada governor Mark Carney complain that sweeping reforms under the so-called "Volcker rule" would reach well beyond their intended scope, and beyond borders.
Bank of Montreal economist Douglas Porter said while the proposed changes are complex and the impacts difficult to quantify, the fact Flaherty and Carney would write their counterparts with concerns is a good indicator the affect could be severe.
"If the liquidity of corporate debt and government debt is somehow compromised, that will have a ripple effect on the economy as a whole and will impact corporations' ability to grow and create jobs," said Terry Campbell, president of the Canadian Bankers Association.
As well, while U.S. government treasury sales are exempted, Canadian government bonds are not.