Dithering on... (en francais)

Bank mergers on the back burner

Bank investors have become frustrated by the mixed messages Ottawa appears to be sending, and one angry portfolio manager said publicly last week that the markets would be better off if the Finance Minister simply kept quiet.

Most industry watchers believe the merger guidelines have actually been ready for more than a year. Any fine-tuning, they add, would have been completed already, and the feeling is that Ottawa is merely waiting for a politically opportune time to release them.

Banks have been clamouring off and on for more certainty on the merger file since 1998, when Mr. Martin, then the finance minister, rejected two proposed mergers: one between Royal Bank of Canada and BMO, and another between CIBC and Toronto-Dominion Bank.

Looks like Paul Martin is giving lessons in dithering to Ralph Goodale. Heavan forbid that the government give banks a definitive message sometime this decade (or the next). In order for Canadian banks to be competitive, they need to be able to plan and forecast. If the Liberals are not going to do anything with this file, they should heed the angry portfolio manager's advice and just keep quiet. I think the banks have been 'trial balloned' to death since 1998.