Feelings of concern mixed with hope surround financial institutions in Canada as they await decisions on the future direction of financial regulations in the United States, a Rotman School of Management seminar has been told.
“I would postulate that we are in a very fragile time and hopefully we will not truly end up with barriers,” Mark Hughes, Group Chief Risk Officer with RBC, told the seminar on Thursday. “For most [foreign] banks, the United States is the largest financial market in the world. It is very important for the financial community to work together and the United States has to be part of that.”
Reversing the Dodd-Frank Act
Hughes’s comments came just a day before U.S. President Donald Trump signed a memorandum aimed at reversing the Dodd-Frank Act, constructed by the Obama administration and passed in response to the 2008 meltdown. The executive order lays out core principles for regulations to enhance the competitiveness of U.S. companies. It could also make major changes to Dodd-Frank to ensure regulations fall in line with the Trump administration’s goals.
Sheryl Kennedy, CEO of Promontory Financial Group Canada ULC and a former deputy governor of the Bank of Canada, told the Rotman meeting that there is a lot of uncertainty and likely to be volatility over the future of financial regulations until everything is hashed out.
Keeping their heads low
While she said there is a general feeling that Canadian banks and other financial institutions should keep their heads low for the time being and not make big investment decisions, there is also hope that Trump will be able to keep his election promise to increase growth in the economy and jobs. “And that usually means opportunity.”
Editor’s note: Read more coverage of the Rotman seminar event in the February issue of The Insurance and Investment Journal magazine.