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MEDIA RELEASE

OTTAWA - Today, the Canadian Community Reinvestment Coalition (CCRC) applauded Finance Minister Paul Martin for rejecting the proposed bank mergers, but called on him to pass laws as soon as possible to protect consumers and ensure that banks and other financial institutions serve all Canadians fairly and well.

"Approving the mergers would have short-changed the public and allowed the banks to nickle and dime their customers even more in the future," said Duff Conacher, Coordinator of Democracy Watch and Chairperson of the CCRC. "The big bankers may see the rejection of the mergers as a step backwards, but it is two steps forward for the public interest, and we hope Paul Martin keeps taking steps in the same direction."

According to the Mackay Task Force on financial services, Canada already has a more concentrated banking industry than any other industrialized country, and no economies of scale would result from the mergers. The Competition Bureau found that the mergers would likely reduce customer choice in most of the communities the banks serve in Canada, and that, despite the bankers' repeated claims, the banks face no threats from competitors, including so-called virtual banks. "The reality of the negative impacts of the mergers on customers has won out over the big bankers' rhetoric," said Conacher, "The Competition Bureau has revealed that the big bank emperors aren't wearing any clothes and were making many false claims about the need to merge."

However, the CCRC agreed with the bankers that the status quo is not an option. "Stopping the mergers is not enough," noted Conacher, "Canadians want better banks, and the only way to get better banks is to pass accountability and consumer protection laws similar to laws in the U.S. and other countries. The Liberal government has failed over the past five years to pass such better banking laws, and we call on the government to pass these laws by the end of 1999."