* Regulators says has "seen this movie before"
* Banker group says rules alone won't prevent crisis
CALGARY, Alberta, March 27 Canada's banking
watchdog warned on Sunday that that the next global financial
crisis may not be far off and that now is the time for
regulators to get tough on the financial industry.
"I think we have seen this movie before, but the amazing
thing is we continue to expect a different ending," said Ted
Price, assistant superintendent of the Office of the
Superintendent of Financial Institutions (OSFI), according to
the prepared text of a speech in Calgary, Alberta.
The world's banks are now entering a "dangerous" phase from
a regulator's point of view, where profits are strong and they
are increasingly willing to invest in risky assets that offer
high returns, he said.
What comes next is usually a reluctance to stop risky
behavior even though returns are diminishing, setting the stage
for the next crisis. "I believe we have passed the easy part of
the cycle, and it is time for regulators to get tough," he
Price's blunt warning came as the global banking group, the
Institute of International Finance, is pushing back against
efforts by G20 policy makers to impose stricter capital and
liquidity standards on banks in hopes of preventing bank
failures and bailouts like those seen in the last crisis.
Rick Waugh, IIF vice-chairman and Scotiabank (BNS.TO) chief
executive, said it is a mistake to think rules alone can
protect against future meltdowns.
"You can have the safest banking system in the world, but
you won't have any growth or jobs. You've got to find a
balance," he told Reuters.
"We just don't use the hammer when a chisel is more
(Reporting by Louise Egan; Editing by Marguerita Choy)