By Tony Keller
(Illustration: Dan Page)
One morning in late January, 1998, the Bank of Montreal CEO Matthew Barrett and Royal Bank chief John Cleghorn paid a visit to the editorial board of The Globe and Mail. They were there to sell us—a small group that included reporters, columnists, editors and me, then the Globe’s editorial page editor—on the new, borderless future for financial services, of which the proposed merger of their two banks was but the first step. They didn’t have to sell very hard.
All of us in the boardroom knew what was to come. As sure as the Railway Lands across the street would soon be filled with condo towers, so the map of global banking was about to be redrawn. Deregulation was picking up speed. Borders were going to be erased. Rules, such as the one preventing foreign ownership of Canadian chartered banks, would be rewritten. A handful of giant transnational banks would soon be headed for our shores. “We want to try to survive in the next century,” Cleghorn told us. RBC and BMO couldn’t afford to be “standing on the sidelines, watching the parade go by,” added Barrett. We all know how the story ended: then–finance minister Paul Martin didn’t let anyone join the parade, including intended partners CIBC and TD, a decision that infuriated the banks, but one they’d thank him for when the financial crisis hit.
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