- Originally from our sister publication, Advisor.ca.
World leaders need to co-operate on building a sustainable global financial framework, even if it means setting aside some of their national priorities in the process. The stakes are simply too high for larger economic players to chart their own course, according to a Canadian with some recent experience on the international stage.
“Around the world, there are quite a number of issues—social, financial, economic—and we really are in a position where we have to act as a group,” says Guy Cormier, vice-president, finance, Desjardins Group. “We must work as a united group focused on the specific point that we want to achieve.”
Cormier has a unique perspective on global co-operation—he was part of the Canadian delegation to the G-20Y Summit in Paris earlier this month. More than 60 delegates from 18 countries met to set the agenda for November’s meeting of G-20 leaders.
Cormier was a member of a sub-committee focused on financial stability and regulatory issues in emerging markets. But the committee soon decided that its mandate was too narrowly focused.
“We cannot talk of regulatory issues in emerging markets—we think there are regulatory issues in all the markets,” says Cormier. “We cannot think that we’ll have some regulations only for emerging markets; the [global] economy is too interlinked.”
The committee essentially acknowledged that the developed world no longer had much credibility to preach to emerging markets on the topic of financial regulation.
“In the last five years, all the issues that we have had in the international economy have not been caused by the emerging markets,” Cormier says. “Most of that time we’ve had problems with the U.S. and now we have issues with Europe. It’s not just a question of emerging markets; it’s a question of the worldwide market.”
As a result, the committee recommended the G-20 address worldwide regulation. The committee looked to the mistakes of the recent past to find areas where global financial regulation could be improved.
“It is sure that we have to learn from our mistakes, but emerging markets will benefit from our mistakes,” he says. “When we talk about regulating emerging markets, we cannot just go and meet them and tell them how they should be regulated. It’s a question of how we should be regulated as a world.”
Still, there is much work to be done in developing the financial systems of emerging markets before they can take full advantage of the object lessons the developed world has presented.
“Stability in the financial markets must come with better access to financial services,” he explains. “There are too many people in these countries who do not have access to a financial institution. We should promote more financial access to the citizens of these countries.”
On this front, the Desjardins name provided Cormier with some clout; the company has a 30-year track record in developing financial services in emerging markets through its Desjardins International Development division.
The meeting left Cormier with an appreciation for the importance of multilateral policy creation.
“We won’t succeed regarding sustainable financial stability, economic growth and fix all our social problems if we try to do it in each country individually,” he says. “The world has to find a solution built on strong co-operation among all leaders.”