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‘No immediate plans’ to bring case against U.S. over Volcker rule: Oliver

Finance Minister Joe Oliver responds to a question during Question Period in the House of Commons in this file photo.

Adrian Wyld/THE CANADIAN PRESS

Finance Minister Joe Oliver says there are "no immediate plans" to bring an international trade arbitrage case against the United States in the dust-up over the Volcker rule.

Following a speech on Tuesday at the Toronto Board of Trade as part of a conference organized by the Private Capital Markets Association of Canada, Mr. Oliver said he hopes "there is no need" to launch a challenge under the North American Free Trade Agreement, adding that "We're not looking to have a dispute here."

In a recent speech in New York, Mr. Oliver called for the U.S. to amend the Volcker rule, part of the post-financial crisis legislation regarding financial services, to allow U.S. banks to buy Canadian government bonds for their own trading accounts. Under the current rules, American banks trading their own book are prohibited from buying any securities other than U.S. government bonds.

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Mr. Oliver made the case in a recent speech that since Canadian government debt is rated higher than American debt, there should be no concerns over its riskiness and U.S. banks should be allowed to buy them. A larger market for Canadian government debt would increase liquidity and potentially lower borrowing costs for Canada.

"We want to come to a solution that we genuinely believe is in the interest of both countries," said Mr. Oliver. "It's clearly in the interest of Canada to have its securities market as broad as possible, and it's in the interest of the U.S. to have access to top credit securities, which Canadian securities are.

"This is not a win-lose situation. This is a win-win solution."

The Volcker rule is currently in effect, but banks have until July 21 to fully comply with the regulation.

When asked whether he had received a response from the Americans regarding his call for them to change the rule, he replied, "I haven't heard anything to suggest one way or another about any respective change…. We'll continue those discussions."

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