Canada's Carney: don't cut off banks from markets

Banks should not be divorced from the markets to avoid liquidity problems. Instead the perimeter of regulation should be expanded, said Mark Carney, the governor of the Bank of Canada.

Carney said that although banks developed a reliance on market liquidity, exacerbating the potential for liquidity problems, banks' activities should not be restricted to deposit taking. He said that banks performed a broad range of market-related activities that were vital to the existence of markets. He said that