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Bank Mergers in Canada
Royal Bank and Bank of Montreal has asked the Minister of Finance to re-consider allowing their banks to merge. ... The reasons for this decision given by the Finance Minister were that the merger is not in the public interest as they would result in
· too much concentration of economic power in Canada in the hands of too few financial institutions
· a reduction in competition in the Canadian financial services sector
· a reduction in the Canadian government’s flexibility to address future concerns
As the banking regulation liberation continued, there is a greater demand on financial institutions to be competitive worldwide. In the past a few years, an increasing number of financial mergers and acquisitions has taken place in developed countries. ... Canada’s banks are heavily regulated yet still face competition from foreign banks and other institutions. ... The arrival of the euro has also expedited cross border transactions, adding further pressure on Canada’s banks to compete internationally. ... So obviously, banks are the most important financial intermediaries in Canada and a strong and competitive Canadian banking sector is critical to the country’s future. Therefore, Canadian government should support the healthy growth of our bank. ... ” And Wendy Dobson of the Rotman School of Management at the University of Toronto pointed out that the “average asset size of the top ten banks in the world is between three and four times the size of the largest Canadian bank.
Approximate Word count = 1185
Approximate Pages = 4.7
(250 words per page double spaced)
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