Monday, February 23, 2009

Shamelessly, Harper is appropriating Paul Martin’s legacy

PM praises Canada's financial sector on U.S. TV
Feb 23, 2009 12:53 PM
Toronto Star

OTTAWA — Prime Minister Stephen Harper hit the Big Apple today — the heart of America's economic meltdown — to boast about Canada's stable banking system, warn against trade protectionism and note the insatiable appetite for oil south of the border.

Left to their own devices, Canadian banks would have blown up too, had Paul Martin not realized that consolidating risk into fewer hands may have short term gains, but long term pains. Which is why he wasn't pumping the happy gas of this announced deal and prevented it from occurring:

Bank of Montreal and Royal Bank to merge

November 13, 1998
CBC News

The Bank of Montreal and the Royal Bank of Canada have announced plans to merge. If the agreement gets regulatory approval, it will be by far the largest bank in Canada and will be in the top ten in North America.

Royal Chairman John Cleghorn says it's potentially one of the most memorable days in the history of banking.

The Royal Bank is Canada's largest, the Bank of Montreal is number three on the list. The merger means the combined bank will have over 80,000 employees. It would have assets of more than $450 billion.

The merger may not happen as quickly as the banks would like. It requires federal approval and the finance minister says that won't happen soon. Paul Martin says he won't give approval until a task force on banking completes its report in a few months.

Observers suggest the merger will mean a significant loss of jobs. The banks say that won't happen. They say early retirements, voluntary departures and job retraining will help reduce the number of employees.

The buzz word for the merger is that size matters. The two organizations says they will prosper because of the new size and the economies of scale.

Immediately after the merger was announced there was a rush of trading on the Toronto Stock Exchange. Shares in Canada's banks were up significantly.


Dr Mike said...

Harper stumping the woods in New York has left me with a queezy feeling of impending doom.

Harper does not give many interviews esp in Canada , so why has he become the gab-fest happy snake oil salesman of the Big Apple.

Could it be he is trying to sell to the world that as the next big crisis hits , that being the bond market collapse , is the fault of the US & no one else.

They don`t call him Mr Deflection for nothing as he & the Fin Min are on a collision course with the bond market for which he will have to write the biggest cheque of his life with other people`s money.

All I can say is someone pinch me in hopes this is all a big dream & when I wake up the TSX is at 15,000.

Dr Mike Popovich

Anonymous said...

Pathetic on Harper's part ... but typical.
Thank you Mr. Martin & the Canadian Competition Bureau for protecting consumers and Canadian investors back in 1998.

These days my bank shares are one of my few investments that I am really not worried about. I will admit I enjoyed receiving my proxies and voting for the first time this year.

Interesting how both BMO and RY are doing especially crappy these days compared to their competition. Both those banks took up more time to vote - seems both had the most CONs on their boards with ties to the "Finance Department". Needless to say anyone with a CON association of any kind was an "against".