Bank of Canada Governor Mark Carney said yesterday that proposals by some advanced nations to ring-fence capital and liquidity standards of foreign bank units operating in their jurisdictions could substantially reduce the global financial system's efficiency.

Carney didn't single out any particular country, but his remarks appear aimed at the Federal Reserve's proposals for far reaching guidelines to change how it regulates foreign banks, subjecting them to many of the same capital and risk management rules their US-based competitors must follow.