(Jonathan Spicer – Reuters)
The White House has dismissed the Canadian government’s claim that a ban on some proprietary trading on Wall Street violates a free-trade agreement, saying it has the legal right to protect its financial system.
The U.S. response came after Canadian Finance Minister Joe Oliver said on Wednesday that the so-called Volcker rule’s ban on U.S. banks’ use of their own money to trade Canadian government bonds probably did not comply with the North American Free Trade Agreement.
The rule, adopted in 2010 but delayed in implementation, is meant to curb the risky proprietary trading blamed for worsening the 2007-2009 financial crisis, which led to bailouts of highly leveraged Wall Street banks by the U.S. government. Click here to read more.
Related: Canadian Minister Says U.S. Volcker Trading Ban Violates NAFTA (Reuters)