Blogs & Comment

Weekend reading: EI, credit cards and a national regulator

Besides the Canada Day festivities on Wednesday, Ottawa has been pretty quiet this week. But while there hasn’t been any Senate-style bickeringor major economic announcements, there are still a few things worth reading about this weekend.
In Maclean’s, Andrew Coynetackles employment insurance asking, “how is it even possible to extend EI to the self-employed? Would they lay themselves off?” He also delves into other EI issues.

As much as unemployment insurance should be about insurance, it should also be about, well, unemployment. Over time, the system has been stretched to cover a number of other, ancillary concerns: first job training, then maternity benefits. These would be better funded out of general revenues: after all, why should job training be provided only to those eligible for unemployment insurance, and not to all workers? Is maternity leave really the sort of catastrophic event for which insurance was designed?

A Toronto Star editorialon credit card reform says Jim Flaherty should pay attention to a Senate committee report that calls for a government board to ensure that credit card company practices are fair to consumers.

The senators were responding to the clamour from both consumers, who wonder why credit card interest rates are staying as high as 29 per cent at a time when other interest rates are at historic lows, and merchants, who told the committee they have been hit with increases of up to 30 per cent in the fees they must pay the credit card companies.

The Vancouver’s Sun‘s editorial board delves into the single national regulator issue, saying a new federal watchdog must focus on consumers.

A national regulator, then, has to ensure that investors are provided with full, truthful and timely disclosure of facts that affect their investments. And it has to have the wherewithal to investigate, prosecute and punish those who betray the public trust.
It’s difficult to see how this can happen under principles-based regulation, which is the approach in vogue throughout the global financial services industry.

The Economisthas an interesting story on the European Central Bank’s monetary policy saying its “looser… than some might think.”

The focus on policy rates may put the ECB in a bad light but these are no longer a reliable guide to the overall monetary-policy stance. If you look at market rates the policy stance in the euro area is as loose as anywhere else, because of stimulus decisions taken at the height of the financial crisis.