The Superintendent of Financial Institutions, John Palmer, said the track record of large bank mergers in the United States and elsewhere is mixed in improving service and enhancing value. He also suggested the failure of a mega-bank would cost taxpayers too much to bail out unless Ottawa changed its ownership restrictions to permit a foreign bank to buy a struggling Canadian institution. The head of the Competition Bureau said the banks could have proposed solutions to the problems his investigators found when they discussed them during the past few months. But the banks didn't offer any, said Konrad von Finckenstein. So I don't think they have been denied that opportunity,'' he told a news conference.
Polls suggest there was widespread disapproval of the banks' plans.
As he has since the Royal and Bank of Montreal shocked the country with the first merger announcement in January, Martin said the banks would have done better to wait until the federal government's landmark study of the industry's future was completed. That study, chaired by Regina lawyer Harold MacKay, was released in September. Martin was clearly angry that the banks jumped the gun. But the government still wanted them to have a chance to make their case for mergers. The reform package, which remains to be fleshed out, also signals a concerted effort by Martin to take charge of the financial services agenda in Canada during a period of worldwide upheaval in banking, insurance and investment businesses.