SEIU Canada

SEIU Canada

October 21, 2009 14:04 ET

SEIU Canada: Flaherty Urged to Stand Strong Over Bank Insurance Sales

TORONTO, ONTARIO--(Marketwire - Oct. 21, 2009) - Finance Minister Jim Flaherty was today urged to hold the line against Canada's largest banks after a bold decision by the government to maintain the separation between the sale of banking and insurance services.

"The Minister made the right call and should not be bullied into backing down from a decision that will safeguard consumers and investors," said Jacob Leibovitch on behalf of SEIU Capital Stewardship.

Mr. Flaherty acted to preserve the integrity of Canada's Bank Act and protect consumers against unfair competition by insisting that regulations governing the sale of insurance by banks extend to digital platforms.

The move perpetuates one of the defining features of Canada's financial system, which held up better than many during the global banking crisis.

"Bank executives are lashing out at the minister because they thought they could get away with inflating earnings by bending the rules. But this is no time to look the other way while bankers game the system," added Mr. Leibovitch.

SEIU represents more than 2-million members who participate in 70 pension plans across North America with combined assets of more than $1.2-trillion.

The organization said that blurring the lines between banking and insurance in Canada would create new long-term systemic risks for investors, particularly since Canadian banks provide limited disclosure of insurance and online earnings to shareholders.

"Sustainable financial markets require clear and transparent rules that all institutions must adhere to," said Mr. Leibovitch.

The separation between banking and insurance in Canada has historically been at the core of the structure that underpins the financial system and should not be circumvented by stealth, he added.

SEIU Capital Stewardship is a leading advocate for the development of sustainable capital markets and pension investment strategies, and for good corporate governance and shareholder rights.

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