At the end of last year, Canada’s Big Six held about 93 per cent of all banking assets in the country. It's the same share they held a decade earlier, and a decade before that.
Critics say that’s a concern because a lack of competition leads to customers paying more in account fees and being paid less interest, while also making it harder for some to get loans and slowing the pace of innovation. “As a consequence there’s a lot of access, a lot of competition and a lot of choice,” said Darren Hannah, vice-president of personal and commercial banking at the Canadian Bankers Association.
Regulatory burdens, while somewhat proportional, could also be lightened further for smaller banks to reflect the lower risks they pose to the financial system, he said. By making the data more mobile, customers can easily shop around for services and switch providers, sort of like porting a cellphone number, rather than the clunky systems currently relied on. The system could mean a quick switch of accounts, including automated deposits, all done online.
“Why can't you Venmo in Canada?” asked Bednar, referring to the popular money transfer service in the U.S. “They can't because of how we regulate our payment system.” Moor however said it was ridiculous to think adding competition would mean less stability, and that the failures aren't representative of the Canadian market.
Are foreign companies even allowed to compete against this oligopoly? No wonder they have 93%.
One of the (unintended?) consequences of the level of cdn financial regulation. seeing the exact same squeeze in the indi capital markets, fewer and fewer participants, sprinkle in a mix of regulatory capture and the cake is baked. we need effective oversight of regulation.