Whose side are the banks on anyway? Do we really want them taking over the Toronto Stock Exchange?
A lot of Canadians don't feel so good about our banks. I know, don't get you started. High fees. Low interest rates on your savings. But 18 per cent or more on your credit card balance.
And talk about paychecks. Bank executives pay themselves $11 million dollars a year. Each! That's about 150 times the average Canadian family wage.
Well, you might say, it's a dog eat dog world out there. But not so much for the Canadian banks. According to laws made by our elected representatives, Canadian banks don't face the tough world of international competition.
Foreign companies can't compete directly and can't take them over. Canadian banks are powerful, rich, arrogant and dominate the Canadian economy. Yes, we love to hate our banks. So who in the world would want our banks to own the Toronto Stock Exchange?
Well, I would. And I'm not the only one. Look at it this way. The banks may be big money-sucking tools of the capitalist establishment. But they are our big money-sucking tools of the capitalist establishment. The question is not whether or not a big profitable corporation will own our stock market. That's a given. The only question is which one.
And I suspect that it is to the benefit of most Canadians that the consortium of banks, insurance companies and pension funds making up Maple Group are the best chance of keeping a crucial industry here at home. Some have said the powerful banks will just have one more stick to beat us with. But while they may be protected against foreign competition, the companies that will own the Maple Group go head to head in the same market.
They may compete amongst themselves, but that cluster of companies has one common interest. They combine to make up one of the last strong domestic industries still in Canadian hands: Finance.
While most of us think of banking in terms of things like savings accounts, mortgages and fees, the fact is anyone can do retail banking. In the United States, banks with a just a few million dollars on their books provide full retail services. Finance is an industry hidden to most Canadians even though it is huge. It involves raising big wads of money in the form of bonds, loans and stocks.
It is the mechanism for creating new companies, expanding existing companies and building huge things like pipelines or power projects that no one individual or corporation could afford to do on its own. Places like New York and London are the giants of finance. But Toronto remains a player.
Canada will be left behind
Measures of such things put Toronto in the top ten, above Frankfurt, and virtually tied with Zurich and Geneva. I am currently reading a book by the dead Cambridge historian George Macaulay Trevelyan: A "shortened" history of England. Through history it is clear that the command of finance was one reason some countries rose to prominence while others faded to third rate, not only in times of peace, but also, and especially, in times of war.
Amsterdam and Lisbon were once leading financial capitals. But each lost its edge. Letting London buy the TSX would not mean instant death to Toronto or Canada as a financial centre, but it could well lead to a gradual erosion. After all, stock listings and their management are important tools of finance.
As I said when London first proposed a merger with Toronto, running a stock exchange provides an economy with many spinoff jobs. A lot of those jobs are in banks and financial firms. Critics say that if the TSX tries to stand alone instead of merging with a titan, Canada will be left behind and become irrelevant on the world financial stage.
Maybe so. Perhaps we can never become a titan on our own, but history is not yet over. If Canada loses its major stock exchange to foreign owners and foreign regulation, it will likely never come back. Once in the hands of the Canadian banks and financial firms, no one can come and snatch it away again.
Usually we think of the Council of Canadians, a social justice group, as being the voice of economic nationalism in this country. This time, we are seeing something new: Corporate economic nationalism backed with cash. This time, we and the banks are on the same side. And the Canadian banks are champions with clout.
But that still doesn't mean we like their fees.