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Banks play very important role in Canadian economy; they hold up to 70% of domestic assets. Most of Canadians use banks for their various purposes, but the thing that no one argues in these days the use of a bank is essential. Banks in Canada especially the five biggest banks are the biggest corporations in Canada. Any of the big five banks has a greater assets and revenues than the Federal Government. That’s why any decisions made toward banks are important to the economist and financial experts as well as to the public in general .
In 1998, four of Canada’s biggest banks have anticipated the idea of merging. One was proposal was between Royal Bank of Canada and Bank of Montreal and the other proposal was between CIBC and The Toronto Dominion Bank. This meant the loss of thousands of Canadians jobs and the closing of a massive number of branches in the whole country despite the substantial raise of prices for services due to the reduction of competition for these main reasons the minister of finance have ruled against the merging in 1998 .
However, two years ago a senate has concluded that merger ought to be allowed . Also Canada's five largest banks, including Bank of Nova Scotia, Bank of Montreal and Canadian Imperial Bank of Commerce, have been fighting to merge. There have been a lot of debates of whether to merge or not. A lot of supporting parties have their reasoning as well as the opposing parties.
Today, banks are facing new challenges brought on by rapid technological changes, growing competition from global financial players, and changing customer needs. Bank of Canada Governor David Dodge’s called for allowing bank mergers so that Canadia ...