Bloomberg "Anywhere" Remote Login Bloomberg "Terminal" Request a Demo

Bloomberg

Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.

Company

Financial Products

Enterprise Products

Media

Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000

Communications

Industry Products

Media Services

Follow Us

Scotiabank CEO Warns Against ‘Overly Prescriptive’ Regulation

April 5 (Bloomberg) -- Financial reforms including ones proposed by the Basel Committee on Banking Supervision may work against countries such as Canada, Bank of Nova Scotia Chief Executive Officer Richard Waugh said.

“The approach currently being taken is in danger of placing too much emphasis on overly prescriptive rules and requirements, which have never proven effective in preventing crises,” said Waugh, according to the text of a speech he will deliver today at the bank’s 179th annual meeting of shareholders in Halifax, Nova Scotia.

Waugh, head of Canada’s third-largest bank, said many industry reforms are reacting to previous crises rather than preventing new ones. Instead, he recommended banks adopt a “low to moderate risk appetite” while keeping sustainable profit levels.

“The next crisis isn’t likely to look like the last one, and it’s impossible to design rules for every scenario,” Waugh said. “That’s why the focus needs to be on strong principles of sound supervision and risk management, not rules.”

Canada’s banks didn’t require government bailouts during the financial crisis and have been ranked the world’s soundest for the past three years by the Geneva-based World Economic Forum.

Waugh said his Toronto-based bank is supportive of higher capital requirements, although it has “the potential to stifle economic growth.”

To contact the reporter on this story: Sean B. Pasternak in Toronto at spasternak@bloomberg.net.

To contact the editors responsible for this story: David Scanlan at dscanlan@bloomberg.net; David Scheer at dscheer@bloomberg.net.

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.