Canada as a 13th reserve district? Federalism and the governance of North American monetary union
If Canada was to join a North American monetary union, what kind of influence might it have over monetary policymaking within the union? Some NAMU supporters suggest that Canada could become the 13th reserve district within the US Federal Reserve system, and that its influence would then be similar to that of European countries, which have joined the euro‐zone and its new European Central Bank (ECB). This article highlights how the more centralized federal structure of the US Fed, as well as the quasi‐private nature of the Reserve Banks, would, in fact, complicate Canada's efforts to obtain the same influence that individual European countries have had within the ECB. The article also notes that the question of Canadian representation within the Fed brings to the surface a longstanding debate within Canada about the lack of federalism within the Bank of Canada. NAMU supporters from some provinces of Canada, notably Quebec, have been less concerned about Canada's influence within the Fed because their provincial governments already have no say in Canadian monetary policymaking. In these ways, the NAMU debate raises important governance issues relating to not just the federal structure of US Fed but also the lack of formal regional representation in Canada's existing system of monetary policymaking.