One common scare tactic deployed by anti-financial reform forces is that regulation will hurt the supply of credit -- lenders will be so overwhelmed with new rules that they'll be unable to offer as many loans as before, hurting customers. Readers may recall the term "economic blackmail." (Of course, some loans shouldn't be offered -- many of the products that lead to our current crisis were designed benefit lenders while hurting borrowers, not provide useful investment capital.) Similar claims are being made about the proposed Consumer Financial Protection Agency. But, via Pat Garofalo, it turns out that Canada has a Consumer Financial Protection Agency, and it didn't hurt credit availability there -- even the Canadian financial sector lobbyist quoted in the story says so. There are some differences between the Canadian system and ours, but Canada has one of the strongest financial systems in the world right now, and we could learn a thing or two from them.
-- Tim Fernholz
