to be appropriate for firms of all sizes, while providing appropriate protection for investors. j. allen, w. engert, and y. liu. " are canadian banks efficient? a canada - u. s. comparison. " financial system review. ( december 2006 ), p. 61. the need for improved enforcement let me turn now to enforcement. markets work more efficiently when they operate under clear, transparent, and reasonable rules and principles. but even the best rules won't help if they are not enforced. while we have seen some first steps to strengthen enforcement over the past couple of years, there still is a perception, both in canada and abroad, that canadian authorities aren't consistent in their efforts to enforce the rules against insider trading and other offences, nor tough enough in rooting out and punishing fraud. the investment dealers association's task force to modernize securities legislation, chaired by tom allen, has recently argued that information should be made more readily available to - and shared more readily by - investigators and prosecutors, and that training for these groups should be improved. a federal - provincial working group was recently formed to address these issues. but we cannot lose any momentum in this area. it's vital that we move quickly and forcefully to strengthen enforcement, so that investors and firms are confident that everyone is playing by the rules. i recognize that improving enforcement will require considerable effort and extensive co - operation among prosecutors, the police, securities commissions, and industry groups. but we can't lose sight of the fact that this will pay off in the long run. for example, at the bank, we've put a great deal of effort into co - operating with law - enforcement agencies, and the justice system, to fight counterfeit currency. and while levels of counterfeits are still higher than we would like, we have seen a steady decline in the number of counterfeits detected since the beginning of 2004. thanks to increased effort and co - operation, we're moving in the right direction. pension regulation pension regulation is another important issue for the efficiency of canada's capital markets. there is a crucial need for a framework that provides the appropriate incentives for employers to establish and maintain pension plans, so that the vast pools of capital in these plans can make their maximum contribution to the efficiency of the canadian economy. but our current regulatory framework instead provides a number of disincentives for firms to establish or maintain defined - benefit ( db ) pension plans.

for the canadian economy. today, a similar effort is needed. while canada's macroeconomic policies are second to none in supporting efficiency, our structural policies need work. we need to revisit the spirit of the porter commission and build regulatory frameworks that promote competition, innovation, and efficiency. in particular, we need action to support efficiency through the way that we regulate our financial institutions, securities markets, and pension funds. equally importantly, we need action to improve the way we enforce our regulations. but improving efficiency is everybody's business. once policy - makers do their job, it is up to the private sector to respond and take advantage of the opportunities to improve efficiency. the bank of canada remains committed to doing its part. if we all promote efficiency, then we all can reap the benefits of a more efficient financial system and a stronger economy in the future. j. hately. " the'maple bond'market. " financial system review. ( december 2006 ), p. 35.