Harper calls for 'enlightened sovereignty'

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Stephen Harper is warning that some countries are in danger of imposing excessive and arbitrary restrictions on their banking sectors, in a speech which argues that the nations of the world must take on shared responsibility for the world but do it by addressing their own policies at home.

One day after French President Nicolas Sarkozy called not only for tighter financial reforms co-ordinated around the world, but for global bodies to have a more interventionist role in co-ordinating issues ranging from the environment to labour standards, Mr. Harper took a very different tack in a speech to the World Economic Forum in Davos, Switzerland.

He argued it is a time for all nations to change their own policies for the global good, from regulating banks to reducing trade restrictions to improving the health of children - calling it "enlightened sovereignty."

But a week after U.S. President Barack Obama called for restrictions on the trading activities of banks there, Mr. Harper warned safeguards need to be improved without interventionist micro-management.

And instead of global regulation, he wants national standards, which will face international review and G20 peer pressure. Canada has backed G20 plans to improve standards for thinks like bank capital and liquidity, but has shown concern about nations proposing their own more interventionist measures in discussions in Davos, sources say.

" Canada also believes that financial sector regulation must have the right purposes and must not be excessive," Mr. Harper said in notes for his speech.

"Let me just say, I understand why there are calls for such an approach in some circles," he said, noting the public anger at bailouts of big banks in some countries.

He added: "Canada will not go down the path of excessive, arbitrary or punitive regulation of its financial sector."

Mr. Harper also repeated calls for nations to reduce protectionist barriers - without waiting for others to go first. And he said the stimulus plans that G20 countries agreed to in 2008 must continue for now, but it's time to plot "exit strategies" so that countries will not continue to pile up debt as the recovery solidifies.

Mr. Harper's speech is designed to set out his agenda as host of two major summits, of the G8 and G20 leaders in June.

While the G20 has taken over the role as the world's economic steering committee, the G8 club of wealthy nations is still looking for a mission k-and Mr. Harper said it should be in promoting development and democracy.

The G8 can deal with issues like nuclear proliferation because tackling them requires "the close co-operation of friends and like-minded allies."

He outlined his plan to press the G8 to keep their past promises to double foreign aid, and push them to launch a major initiative to improve the health of pregnant women and children in developing countries.

"Far too many lives and futures have been lost. And to the world's shame, so many have been lost for want of relatively simple health solutions, within reach of the international community," he said in the draft of the speech.