Is BofC Governor A Blog Reader

Last week we watched a variety of bank earnings results, some good, some so-so. Perhaps folks in Ottawa were paying attention to the divergence in results and growth strategies/opportunities.

According to a Bloomberg report, it appears that Bank of Canada Governor David Dodge is now seized with a not-so-novel idea raised again here just last week.

All kidding aside, this speech by Governor Dodge provides some useful political cover to the federal Minister of Finance should he choose to fly a trial balloon about bank mergers. It wasn’t that long ago when former Finance Minister Paul Martin told the CIBC that it couldn’t acquire Canada Trust, only to approve an acquisition by the Toronto-Dominion a year later. Things move fast.

Perhaps the classic “tough but fair” strategy will be trotted out: approve one merger involving a smaller institution but turn down any subsequent deals in the wake of the first. I can hear the Minister now: “we respect the role of free enterprise in our markets, but have a duty to ensure that consumers have access to a competitive banking landscape….”

MRM