The level of concentration in Canada’s banking sector has a high profile after the proposed big bank mergers. This briefing looks at the degree of Canadian banking concentration in the context of other advanced industrial economies.
Document Highlights
Canadians have a deep-seated ambivalence toward their banks. They see a domestic banking landscape with a handful of large banks. However, Canadians are also coming to realize that on the international stage their banks are increasingly small players. Over the past two decades, these banks have increased their dominance by swallowing up most Canadian securities firms and trust companies.
When four of the large Canadian banks, proposed in 1998, to merge into two much larger banks, the proposal was generally unpopular in the country. While the banks made the case that they needed the advantages of size to compete internationally, public opinion saw the potential for reduced domestic competition, job losses and branch closures.
This paper looks at:
- International pressures
- whether Canadian banking is highly concentrated
- domestic vs. foreign assets
