Hunkin, John; Gemmell, Robert
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A response to the question "Can Canadian banks survive in the Global arena?" The current unpopularity of bankers. The basic criteria for survival. A better question: "How many Canadian banks will equip themselves for the challenge of the global marketplace?" and the speaker's response. The global choice made by CIBC Wood Gundy three years ago and reasons for it. An aggressive strategy chosen by CIBC Wood Gundy, focused on four key elements: targetting selected industries where they had a competitive advantage; adding new product capabilities; extending industry and product strengths to an international network across Europe and Asia; integrating corporate and investment banks to give clients access to the full range of capabilities. Integrating two very different cultures with two different lifestyles. New tools as a consequence of integration. Evidence that the strategy is working. Intense competition from firms such as Salomon Brothers making it critical to maintain financial agility. Market leaders as those who invest in being the best.
How, over the relatively short time-frame of just the last five years, fundamental changes have taken place in the Canadian marketplace. A relentless and unstoppable trend toward clients adopting primarily a North American marketplace focus which is a fundamental change from the traditional strict Canadian marketplace focus of five years ago. The lack of evolution to the same extent in the investment dealer community, primarily the Canadian investment dealers. A review of several significant factors that explain and illustrate this trend: the introduction of the Multi-Jurisdictional Disclosure System in August, 1991; the rebirth of a high-yield market in 1991 in the United States; differences in the rates of increase between strictly Canadian activity (marginal increase) and cross-border strategic activity (100% increase); the equity frontier. A summary. A move toward world-class Canadian companies moving, if not to the global markets, then certainly toward the North American markets. Forming strategic partnerships to meet changing client needs; lagging somewhat in Canada relative to the changing needs of our client base. Evidence of some progress. Proper co-operation and co-ordination "still to be defined."