Political Prisoner: A Securities Regulator for Canada - Again?

Abstract

Attempts to create a national securities regulator for Canada have been held hostage to politics for decades, a sorry testimony to the Rajan and Zingales thesis that the political structures within a country are a primary impediment to financial market development. Yet another initiative to address this issue was recently announced. This short piece looks back at the last fifteen years of failed proposals, including a flirtation with an Australian model, in an effort to gauge the likelihood of success this time round. Unfortunately, the attempts to create a national securities regulator for Canada have been marred in the past by the search for easy answers elsewhere. The main problem with the current initiative appears to be its lack of focus. The burning (albeit slow burning) and long unresolved issue of a national regulator is just one of several other matters under consideration. It is easy to see how several of these other less contentious, and quite interesting, proposals may get taken up and moved forward, leaving the hard nut of how to create a national securities regulator uncracked. On the other hand, if the issue itself of a national securities regulator is fading away, does this indicate increasing marginalization of the Canadian markets themselves.