Monday, February 26, 2007

Dion Doesn't Favor Bank Mergers

Reuters, 26 February 2007

Liberal leader Stephane Dion said on Monday he did not favor bank mergers but would be willing to listen to any new arguments banks might advance for linking up.

Dion, the man most likely to run Canada's government if Conservative Prime Minister Stephen Harper loses the next election, said he believed Canada's banking system was working well as it is now.

"I do not favor bank mergers, but I am certainly willing to look at the issue to see how we may improve the system that is working well if you compare it to other countries," he told Reuters in his office on Parliament Hill.

Canada has six main banks, which have argued that they need to merge in order to meet global competition. The Conservatives may be their most natural ally, but Finance Minister Jim Flaherty has repeatedly said the issue was not a priority.

If the Liberals also oppose mergers, the file is unlikely to advance, at least until one of the parties gets a secure majority of seats in the House of Commons.

Dion said he understood "the need to be bigger in this competitive world."

But he said: "I think we need to protect our banking system, which is working very well in Canada. If they come up with additional reasons for bank mergers, we'll study them."

The Conservatives won a minority government in the January 2006 election. Canada could return to the polls this year, though many analysts do not expect an election till 2008.