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THE FUTURE STARTS NOW
A Study on the Financial Services Sector in Canada

Report of the Standing Committee on Finance

Maurizio Bevilacqua, M.P.
Chairman

December 1998


TABLE OF CONTENTS

PRELIMINARY PAGES

CHAIRMAN'S MESSAGE

CHAPTER 1: THE 1990s: STEPS IN THE RIGHT DIRECTION

EVOLUTION OF THE FINANCIAL SERVICES SECTOR

WHY IS THE TASK FORCE REPORT SO IMPORTANT?

THE IMPACT OF TECHNOLOGY

CHANGING DEMOGRAPHICS

GLOBALIZATION OF MARKETS

WHAT DOES THE COMMITTEE SEEK TO ACHIEVE?

CHAPTER 2: THE CHANGING FACE OF THE FINANCIAL SECTOR IN CANADA

i. Globalization

ii. Consolidation

iii. New Entrants

iv. Technological Innovations

v. Demographic Trends

vi. Conclusion

CHAPTER 3: COMPETITION AND COMPETITIVENESS

COMPETITION

How Well Are Canadians Served by the Financial Services Sector?

1. Encouraging New Domestic Entrants

2. The Role of Foreign Institutions

3. The Link Between Technology and Foreign Competition

4. Expanded Powers for Existing Institutions

5. The Empowerment of Consumers

6. Regulation

ENHANCING COMPETITION BY ALLOWING EXPANDED POWERS FOR FINANCIAL INSTITUTIONS

The Specific Arguments Against Expanded Powers

COMPETITIVENESS

Ownership

A Flexible Definition of Wide Holdings

The Importance of Canadian Control

Demutualization

Financial Holding Companies (FHC)

Accounting Rules

The Co-operative Sector

Taxation

CHAPTER 4: FINANCIAL SECTOR CONSOLIDATION AND THE MERGER REVIEW PROCESS

Mergers and Acquisitions Around the World

Mergers and Acquisitions in Canada

No Mandate to Examine Bank Mergers

Mergers and the Impact of Greater Size

The Public Interest: the Priority

CHAPTER 5: REGULATION

Rationale for Regulation

The Forces of Change

Prudential Regulation in a Modern Environment

An Expanded Role for OSFI

Streamlining Regulatory Processes

Governance of OSFI

Intergovernmental Overlap

Regulating New Entrants Without a Physical Presence

CHAPTER 6: CONSUMER EMPOWERMENT

Coercive Tied Selling

Other Consumer Empowerment Measures

Disclosure and Transparency

Protection of Personal Privacy

Financial Sector Ombudsman

Consumer Organisations

CHAPTER 7: CORPORATE CONDUCT AND CANADIANS EXPECTATIONS

Business Financing

Relationship Banking and SMEs

Knowledge-Based Industries

Social Performance

Community Accountability Statements

LIST OF RECOMMENDATIONS

APPENDIX A - List of Witnesses

APPENDIX B - List of Submissions

APPENDIX C - Members of Parliament who held Townhall Meetings

DISSENTING OPINION OF THE OFFICIAL OPPOSITION (REFORM PARTY)

DISSENTING OPINION OF THE BLOC QUÉBÉCOIS

DISSENTING OPINION OF THE NEW DEMOCRATIC PARTY

DISSENTING OPINION OF THE PROGRESSIVE CONSERVATIVE PARTY

MINUTES OF PROCEEDINGS


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