Canada is not considering the kind of restrictions on proprietary trading by financial institutions proposed under the Volcker Rule in the U.S., Bank of Canada Governor Mark Carney said Thursday.

"Canadian officials are not contemplating a similar restriction on business activities. We think a more effective way to get the risk/rewards right is to get the capital rules right," Carney said.

He was speaking to reporters after a speech at the annual convention of the International Organization of Securities Commissions.

Carney said global discussions surrounding new rules for capital requirements for banks under the developing Basel III agreement are progressing well.

In response to a question from a member of the audience, Carney said it is important for all regulators to be involved in ensuring financial market stability in order to avoid a situation in which new financial regulation inadvertently creates new forms of risk beyond a core of regulated activity.

Carney also stressed the need for governments' fiscal paths to be sustainable.

"What we are seeing at the moment is a strong demand from the market for more credible plans, more rapid plans," he said.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.