"Too Big To Fail" May Spell Opportunities for Job Seekers Willing to Work for RBC, TD and Scotia
The Royal Bank of Canada, Toronto-Dominion Bank and the Bank of Nova Scotia might face stronger regulation going forward now that the Bank of Canada has stated formally in a report that Canada's three largest banks are "systemically important" on a national basis.
On the other hand, job seekers will most likely feel more secure working for these banks today than ever before, a career coach confided to eFinancialCareers.
The central bank working paper could add to concerns about more stringent capital rules facing the sector, according to Reuters. The news agency said the report stated that "global regulators are considering imposing tighter capital rules for banks considered to be systemically important or 'too big to fail,' meaning their collapse would imperil the wider financial system."
Opportunity for job seekers
For job seekers, this could be seen as an opportunity. "In turbulent times, people are drawn to safe havens," said Alan Kearns, co-founder of national Canadian career and leadership coaching firm CareerJoy. "People are drawn to institutions that have a means of stability to them."
Suggesting that Royal Bank of Canada's characterization of RBC, Toronto-Dominion and Scotiabank are all "too big to fail" will make all three more attractive places to work.
"We find the empirical evidence that the systemic importance of the top three banks, RBC, TD and BNS, is greater than other banks," the bank said in its working paper, authored by Toni Gravelle and Fuchun Li.
Security isn't the only measure
"I'm assuming that the size, health and risk profile of these banks were all taken into account" for purposes of the report, Kearns said, stressing that security isn't the only measure by which bankers should judge institutions they'd like to work for.
"This doesn't mean they can't lay people off in a restructuring," notes Kearns. "You still need to be a high performer wherever you go," he added, but safety is, nonetheless, one of the more highly important careers criteria.
Reuters added that no Canadian bank is believed to be on the radar screen of the global regulators, but many believe that Canada's bank regulator, the Office of the Superintendent of Financial Institutions, could impose tighter rules on domestic banks deemed key to the domestic sector, a move that could ultimately limit their lending capacity.
The central bank, which authored the report, would not have a hand in implementing such regulations, Reuters stated.
Still, the comments by the Bank of Canada suggest that Canada's top banks are so critical to the overall banking system that "the government won't let them go under," Kearns observed.