OSFI has come under a certain amount of media criticism regarding ABCP – the media criticism is completely uninformed and reflects a notion that a regulator of anything should regulate everything – but felt sufficiently pressured to address the issue to take Public Relations action.
Assiduous Readers will remember that I am currently considering the new form of hybrid Tier 1 Capital that dropped, ker-plunk! onto OSFI’s website without notice or explanation. An inquiry directed to OSFI did result in a call from an OSFI staffer who was as helpful as he could be … but background material and discussion papers simply do not exist.
This is completely unacceptable.
We can, for instance, go to the website of the Committee of European Banking Supervisors – which, by the way, looks a lot more professional than the OSFI website – and see a plethora of links to news, other stories, publications and consultations. We can sign up for eMail alerts. And, with a minimum of effort, we can find the publication Proposal for a common EU definition of Tier 1 hybrids, released on March 26, 2008, which deals with the question of cumulativity (which I’ll examine in another post), and includes the information:
12. During the whole process CEBS maintained a dialogue with market participants in order to gain a better understanding of the range of concerns the current definition of own funds in the EU, and especially Tier 1 hybrid capital instruments, causes for market participants and their views on what a more consistent definition would look like.
13. For this purpose, CEBS organized public hearings in June and November 2007 as well as bilateral meetings with representatives of institutions, rating agencies and investors.
14. On 7 December 2007 the draft proposals were published for public consultation. CEBS received 31 responses. The comments and proposals provided have been incorporated, where appropriate. For details please see the feedback table (CEBS 2008 33).
Responses? You want to know what the players are saying? All 31 responses are published and the list of responses is easy to find through the announcement of publication. Anybody who wants to understand the issues and come to an independent judgement as to the adequacy of bank capitalization rules with respect to this issue will find a wealth of information on the European site.
Why does Canada’s financial regulator maintain a third-world website and conduct its practices with such comparitive secrecy?
Canadian banks have mythic status to Canadians, due largely to the lack of large bankruptcies. While I will not grudge OSFI any of the credit for maintaining a strong banking system, I will provide some friendly warning: pull up your socks and communicate your processes more clearly or, when a real crisis actually does hit Canadian banks, the whining about ABCP will seem laughably picayune.
[…] is thoroughly outrageous that OSFI feels empowered to make such far-reaching – and unnecessary – changes to bank […]