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Big 6 Banks’ say ‘Hole in Financial System’ | Role in Freeland’s Convoy Plan

Canada Today | Naomi Oliver | Nov 25, 2022

Pexels Mohamed Almari hole in system - Big 6 Banks’ say 'Hole in Financial System' | Role in Freeland’s Convoy Plan

Image: Pexels/Mohamed Almari

When Deputy Prime Minister Chrystia Freeland called the chief executive officers of Canada’s Big Six banks on Sunday in February before their government invoked the Emergencies Act, the CEOs stressed that the resources at their disposal were to support that to choke off the money pouring in from the convoy protests were limited.

  • Accounts of at least three calls Ms Freeland made with bank CEOs over an eight-day period are contained in summaries dubbed “readouts” and in Ms Freeland’s handwritten notes from the meetings, which took place Thursday at the Investigating the Use of the Emergency Law.
  • At that moment, banks needed court orders to freeze funds, CEOs said, which are slow to grant. To give banks the ability to freeze funds faster, the government needed to sanction protesters under the same financial crime laws it applies to terrorists, three [bank] CEOs said. They also called on the government to close loopholes in systems to monitor transactions by bringing a wider range of payment providers under stricter regulations.
  • Ms Freeland’s first assignment was an attempt to involve the banks in ending the convoy protests and get the bankers’ help in assessing the severity of the damage to Canada’s economy. Subsequent calls focused on working out the complex mechanisms to stop the flow of money to the protesters.
    • What the CEOs weren’t told on the first call on February 13 was that the government was preparing to use the emergency law to expand banks’ powers to freeze accounts.

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  • Bank CEOs:
    • TD’s Mr. Masrani stressed that “Canada’s reputation is at risk,” and was echoed minutes later by Canadian Imperial Bank of Commerce CEO Victor Dodig
    • BMO’s Mr White reportedly called the blockades “a national crisis”, urged Ms Freeland to “act immediately” and quoted a US investor who told him: “I will not invest another red cent in your banana republic in Canada”
  • Banks urge government: Prior to the Feb. 13 conference call, TD TD-T, CIBC CM-T and Bank of Nova Scotia BNS-T had privately encouraged the government to bring non-bank payment providers “more clearly” under existing anti-money laundering laws.
    • That day, Mr Masrani told Ms Freeland the “big hole” in the system was those payment providers, including crowdfunding platforms, and CIBC’s Mr Dodig was also pushing for measures that would cover “the entire financial system,” according to an ad. Another CEO added, “Let’s be clear, they will all eventually move to crypto.”

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