Why Basel III Will Make Canadian Banks Look Very Attractive

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What a difference a few hundred miles makes.

At a Barclays forum in New York JPMorgan's Jamie Dimon contended new global regulations will increase costs for everybody from hedge funds to small investors and create an "operational nightmare" by calling for some derivatives activities to be spun off into a separate unit. Two days later Canadian banking leaders meeting in Toronto were cheerfully plotting ways to deploy all the new "common-equity" capital they're required to bring in-house under the new Basel III rules.

The back story: Canadian banks - rated the soundest on the globe for the past three years by the World Economic Forum - should meet Basel III's new capital requirements by 2012, a full seven years ahead of schedule, according to estimates from RBC Capital Markets.

That's why U.S. professionals might want to consider a move to Canada - or at least one of the Canadian banks. They've had "a more structured environment regulation-wise," than other banks, with a talent pool "that's had to figure out how to make money without taking as much risk," says Alan Kearns, founder of Toronto-based job and leadership coaching firm CareerJoy.

Eyeing Opportunities

Canadian banks are also increasingly setting their sights on U.S. targets, promising still more prospects for job seekers.

At a recent Scotia Capital investors conclave in Toronto, Scotiabank and Royal Bank of Canada officials plotted a course to seek new asset managers to build their wealth management businesses outside Canada as new equity rules free more capital for takeovers.

Toronto-Dominion Bank would consider more takeovers of U.S. consumer banks able to "make some money" for his organization, said CEO Edmund Clark, while Bank of Montreal CEO William Downe said he would deploy excess capital toward internal growth, with his U.S. commercial loans book growing first.

Downe said that Bank of Montreal has already reached the capital-target levels proposed last month by the Basel Committee on Banking Supervision, adding that BMO will also consider takeovers of troubled U.S. banks in any new deals supported by the Federal Deposit Insurance Corp. as uses for its capital.

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