Maverick lawyer argues central bank should provide interest-free money for infrastructure
The lawyer best known for stopping the Supreme Court appointment of Judge Marc Nadon has turned his sights on the Bank of Canada.
Rocco Galati has taken on a case for a group called the Committee for Monetary and Economic Reform, or COMER, which wants the central bank to return to the practice of lending federal and provincial governments interest-free money for infrastructure.
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“They felt it was important in the face of the financial sector meltdown in 2008, the banking meltdown, and the drastic reduction and elimination of human capital infrastructure such as health care, universities and basically the stuff that the Bank of Canada from 1938 to 1974 funded,” Galati said in an interview with CBC’s The Exchange with Amanda Lange.
His clients have been dismissed as conspiracy theorists, but Galati argues the law is there to support their case.
The Bank of Canada was set up in 1935 in the wake of the Great Depression to provide a means for settling international accounts and to provide interest-free loans to government to finance infrastructure investments.
History of infrastructure funding
Projects like the St. Lawrence Seaway and the Trans-Canada highway were funded in this way, and the central bank also underwrote Canada’s Second World War effort as well as the building of hospitals and universities.
But in 1974, the central bank stopped providing interest-free loans to government so it could join the Bank for International Settlements, a kind of central bank of central banks.
Galati argues that from then on private banks became government’s lender, contravening the act that established the central bank.
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