The president of the Canadian Labour Congress wants the federal government to appoint an independent expert monitor to represent the public interest in ongoing discussions to resolve the crisis in the asset-backed commercial paper(ABCP)market.
In a letter to Finance Minister Jim Flaherty, Ken Georgetti writes that “some 80% of our 3.2 million members belong to defined benefit pension plans, as do many more union retirees” and an independent report by Diane Urqhart shows that many pension plans are at risk of taking a significant hit to their assets because of investments in non-bank ABCP.
He also adds that while some large government pension funds are involved in the investor committees trying to work through a solution, there is no one representing the public interest per se.
“I am sure you will also be reflecting on what regulatory changes are needed moving forward so that investment products with significant underlying risk are not sold to pension plans as virtually risk-free,” Georgetti says in his letter.
The committee overseeing the restructuring of third-party ABCP is headed by Purdy Crawford, who announced last week that more time would be needed before the solution could be resolved.
Earlier this week, OSFI superintendent Julie Dickson said it wasn’t the regulator’s fault that the third-party ABCP market became frozen.
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