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For All Nails pt. 140:  Really Boring Stuff

>From the Statist
22 February 1972

Even as its battered neighbour scrambles to repair its economy, North
America continues to reform its own time-tested model.  Last year it
liberalised the stockmarket, sold off NFA holdings, and invested in
new infrastructure. Now it has set its sights on the banks: the
reforms announced on February 17th, though hardly sweeping, may make
CNA '72 tough to beat.

The government hopes that by easing restrictions, as it has long been
expected to do, it will accomplish two things: improve the management
of the banks, and expose them to a little more competition from
foreigners … to encourage better management, the government will
make it easier for foreigners to invest in domestic banks. A 49
percent limit on foreign ownership has been scrapped, and, although
takeovers are off limits, friendly stakes by foreign banks will now be
welcome.

In case all this is not enough to shake up banks' boardrooms, the
Finance Ministry will gain more powers to nudge them along. Instead of
merely approving new directors, it will now decide whether they
deserve reappointment every couple of years. In announcing the new
measures, the government also hopes that the five big local banks will
merge themselves into bigger entities … the Finance Ministry
says it will not force mergers.

Local banks will also face more competition for retail customers and
commercial loans. A new category of licences will allow foreign banks
to open up a handful of branches. To avoid going overboard, the
government will issue only six such licences between now and 1973
… foreign banks, which cannot engage in retail business, will
also gain a little more wiggle-room. They will now be allowed to lend
up to 500 million to local companies, up from 100 million before.

These changes will hardly reshape the face of North America's banking
sector. But that is not the point. Local consumers would probably
benefit from even more competition than the Monaghan government is
allowing, but they will benefit a bit nonetheless. And since they are
already better-off than their counterparts in neighbouring Mexico,
they will not complain. Nor will foreign bankers, who delight in
greater opportunity to invest in North America's phenomenal wealth,
stability and financial promise.