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Ottawa, June 24, 1997
1997-051

Government Seeks Task Force Views on Mergers and Acquisitions

Secretary of State (International Financial Institutions) Jim Peterson today released text of a letter to the Task Force on the Future of the Canadian Financial Services Sector seeking their views by July 11, 1997 on mergers and acquisitions in the Canadian financial sector.

___________________
For further information:

Frank Swedlove
Financial Sector Policy
(613) 992-4679

Mr. James C. Baillie
Chairman
Task Force on the Future of the
Canadian Financial Services Sector
12th Floor, East Tower
L'Esplanade Laurier
140 O'Connor Street
Ottawa, Ontario
K1A 0G5

Dear Mr. Baillie:

As you are aware, there have been a number of press reports and announcements of possible mergers or acquisitions involving Canadian financial institutions. The Bank Act provides that the acquisition of a financial institution requires the approval of the Minister of Finance, on the recommendation of the Superintendent of Financial Institutions.

The Task Force has begun its examination of issues affecting the Canadian financial sector, including that of mergers and acquisitions, but is not expected to report before the fall of 1998. To assist the government, it would be most helpful if the Task Force could provide its preliminary views on the appropriate criteria which the government should take into account in reviewing particular transactions, and their relative importance. At this time, I do not expect you to provide views on the 10% widely-held rule for domestic banks, or the appropriateness of a merger of Schedule I banks.

It would be appreciated if the Task Force could provide such advice no later than July 11, 1997.

Yours sincerely,

The Honourable Jim Peterson, P.C., M.P.