"Credit card companies should be federally regulated"



OTTAWA, Aug 26 (Reuters) - Canada's banking regulator should license and approve all financial instruments available to investors in the country, even if they originate in the United States, a new report recommended on Wednesday.



The report by two economists at the Canadian Centre for Policy Alternatives, a left-leaning think tank, also urged the rapid creation of a single securities regulator in Canada to make sure officials can properly monitor markets and detect risky behavior or excesses before they get out of control.



A single financial markets watchdog, replacing the 13 regional regulators now in place, is a key ambition of Finance Minister Jim Flaherty and would bring under federal jurisdiction the "shadow" banking sector. That unregulated sector once accounted for nearly half of all Canadian borrowing and includes non-bank lenders as well as hedge funds and securitized debt vehicles.



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