That’s the view of a C.D. Howe report by John Jason which calls for the regulatory framework for small banks and perhaps the entire financial sector should be reconsidered.
In “Swimming with Whales: How to Encourage Competition from Small Banks,” he highlights that just 2 per cent of the banking assets in Canada are controlled by small to medium sized domestic financial institutions. This is compared to 93 per cent for the big banks, 54 per cent is controlled by the three largest.
Jason writes in his report
that regulatory burdens, capital requirements and disruption from FinTech and other non-regulated challengers are all concerns for Canada’s smaller lenders.
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New regulatory approaches should be considered by Ottawa in order to achieve its aim of supporting smaller lenders.