The same day he told Americans not to resist financial reform, Bank of Canada Governor Mark Carney delivered an assuring message to Canadians -- that he expects the strength of Canadian financial structures to carry it through the growing international crisis.
In an interview with CTV's Question Period on Sunday, Mark Carney said that Canada's economy would remain intact, even if other countries fell back into recession.
"I think the important thing to recognize here is the fundamental strength of our system," Carney said, adding that Canada has one of the most resilient financial systems in the world.
"Canada has many strengths. Those strengths will be manifest through this period, no matter what happens beyond our shores."
Prime Minister Stephen Harper said Sunday that Canada, along with other global economies, can avert a recession but only if they take decisive action to restore business confidence.
Speaking to a U.S. television broadcaster, Harper said companies are sitting on trillions of uninvested dollars that can be put to good use if market confidence is restored.
"At this point if we were to fall into a recession, it would be strictly through frankly an accumulation of lack of confidence in tackling some of the big issues before us," Harper told NBC.
Canada and the U.S., as well as some other non-eurozone counties, have been pressuring European leaders to solve their debt crisis by committing to an expanded emergency fund that would lend security to sovereign debt problems and protect exposed banks.
Carney echoed Harper's words, urging Europe to take action and increase the size of their rescue plan. He said the emergency fund should be pumped up to about one trillion euros, more than twice what is currently committed.
"It's a lot of money, but this is a huge economy. We are talking $1 trillion, maybe slightly more, but this is an $11 trillion Euro economy," Carney told CTV's Question Period.
"This is a difficult time for the global economy. We are still dealing with the aftershocks of a crisis that began in 2007, and became very obvious in the fall of 2008. It is a challenging time for some of the large economies in the world, including the U.S. and the eurozone, and Japan."
Earlier on Sunday, Carney waded into the U.S. financing debate, telling a convention in Washington that the country should not fear banking reform.
Some oppose the new requirement for greater bank capital reserves, claiming the greater reserves have already dried up credit and weakened the system.
Speaking to the prestigious Institute of International Finance, Carney scoffed at the claim. He said there was a far greater probability that credit had slowed not because banks were reluctant to lend, but because would-be borrowers can't afford more debt.
He added that in Canada, which did not experience a home-grown financial crisis, the problem has been that households have borrowed too much, not too little.
Carney said opposition to new international rules was based on the same thinking that resulted in the recent economic collapse that led to a worldwide recession. He said changes were needed when the economy began to falter in 2007 and are still needed today.
Carney said Canada and some other countries that did not suffer a banking collapse plan to be compliant when the rules are implemented in 2013.
With files from The Canadian Press and The Associated Press
