Study Finds Canada's Investment Banks Weathering the Storm
Companies in Canada are benefiting from the fact that the banks upon which they rely for capital markets coverage and mergers and acquisition advisory services are in a much stronger position than those in other markets, according to the results of the most recent Greenwich Associates Canadian Investment Banking Research Study.
“Simply put, Canada’s banks are stronger than some of their counterparts in the US and Europe because they were not as heavily exposed to the mortgage business or structured products,” says Toronto-based Greenwich Associates consultant, Peter Kane. “Because their balance sheets are not as loaded down with assets of deteriorating value, the banks that Canadian companies rely on for credit, capital markets services and M&A advice have not faced the same capitalisation crisis that has brought the US banking system to its knees.”
With Canada having much earlier moved to the universal banking model (i.e., bank-owned dealers), it has not suffered from this type of forced consolidation and historic government intervention. As a result, the competitive landscape of banks servicing Canadian companies has to this point remained relatively unchanged through the crisis.