The Future Of Banking Canadian Essay Research

The Future Of Banking (Canadian) Essay, Research Paper The Future Of The Canadian Financial Institutions As we approach the information age, society and all of its components must change. Some elements of society are doing this quickly, embracing new technologies and production methods. In this way they are preparing themselves for the future. Other segments of society realise that change is inevitable but for their own benefit try to slow it down. Thus while they delay change they do not in fact stop it. Finally, there are those elements of society who fear change. This is however; a dying breed, if not today then assuredly tomorrow. The Financial Institutions of Canada neither fear change nor are attempting to slow it down. Instead they are embracing change and new

utilising new technology at a rate perhaps unparalleled in society. In this way, they are preparing themselves to compete in a global village. Technology alone can?t do this for them. In order to compete globally, the Financial Institutions require the revision of the existing regulations designed with a past time period in mind. Due to these regulations they are currently restricted from acquiring rivals or merging to better meet market conditions. This has proven incredibly harmful in the past twenty years as the relative size of our financial institutions has fallen off of the global charts. This has been harmful not only to the industry but to the country as a whole. If the Canadian Financial Institutions are to have a future globally then they must be allowed to expand both

at home and abroad. To date, artificial barriers imposed through the governments have resulted in a financial services sector less efficient than if it were simply left to competition in a free market system. Technology will be a major determinant to the successes or failures of the Financial Institutions in the years to come. This is true not only because Canada is not an island and is subject to major forces of internationalisation, pressures affecting the industry (such as technology, internationalisation and changes in the economic environment, including demographics and changed inflationary expectations). trade-off between prudential regulation and freedom of competition. limits on what government can do, particularly in light of the pressures imposed by internationalisation

and technology. Canada is not an island. Parliament cannot legislate vibrancy. In our free market system, principal reliance should be placed on competition and disclosure as the disciplines to ensure that businesses operate efficiently and effectively. That is particularly important because more interventionist rules are difficult to formulate in a balanced way, particularly in times of change. Yet some rules going beyond competition and disclosure are generally accepted to be necessary in the financial services sector. Prudential regulation, designed to require prudent conduct on the part of regulated financial institutions and to minimise the occurrence and cost of failures, is applied in Canada as in other free market countries. Other rules, dealing for example with consumer

protection and privacy issues, are generally accepted. What seems important to us is that all such rules should be carefully formulated so that the degree of intervention in the business operations of financial institutions is the minimum necessary to satisfy the particular public policy objective, and reflects an appropriate balance between prudential regulation and other objectives. This Part canvasses issues concerning the conduct of financial institutions in the marketplace. The underlying philosophy is that competition and disclosure should be the principal motivators of financial institutions to operate in the public interest. However, regulatory controls are appropriate for prudential purposes and in furtherance of other overriding policy objectives. Any such intervention