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February 23, 2022

International regulation: the next financial markets threat

By Deirdre McMurdy, Sympatico / MSN Finance

It was only a matter of time: now that the horse is well down the road, it's time to bolt the barn door.

Whenever there is a crisis - especially one in financial markets that causes acute political pressure - the most common reaction is to throw all manner of reactive regulation at the situation. Well after the fact, of course, and regardless of the new problems that myriad new rules may cause those who are trying to operate their way out of a tight spot.

So it is with the European Union's decision to collaborate on a tough new regulatory regime for global financial markets. That pre-emptive strike is designed to force the hand of the U.S. and Canada, countries that favor a lighter hand on the wheel, in part because of the lessons learned from the damaging fallout from the Sarbanes-Oxley legislation.

With market confidence hanging in the balance, the Sarbanes-Oxley rules (better known as SOx-which makes them sound far more benign than they are) made it much more difficult for public companies in the U.S. and the many inter-listed Canadian ventures, to get on with business. It wrapped them up in red tape and added a big bow.

Of course transparency and disclosure and solid regulations are an important part of any recovery strategy. But the idea that one set of rules could ever fit all - especially when you consider the difference between European and North American economies and business cultures - is unrealistic. And not a little frightening.

We need to collaborate, but still retain the right to craft our own solutions. Toadvocate otherwise is really more about political posturing than anything else. And we've all had quite enough of that domestically without taking it global.



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