Quebec Banking

Quebec Banking

Gorton & Huang (2002) relate that the Canadian and U.S. banking systems differed significantly during in the 1800s to mid-1900s. Canada had forty banks, while its southern neighbour had thousands. Banks are solidified through coalitions and proficient inter-branching, perhaps the reason behind less bank panics in the North over that time period.

Banking in Canada has been stable since the 1830s. The Canadian Bankers’ Association was established in 1891 (Calomiris & Gorton, 1990). The following is an attempt to take a closer look at three important banks in Quebec: CIBC (Canadian Imperial Bank of Commerce), HSBC (Hong Kong and Shanghai Banking Corporation) and, mostly, BMO (Bank of Montreal).

CIBC (TSX, NYSE: CM) has been known to implement the knowledge management approach (Allee, 1997). In 2010, CIBC had 42,000 employees, 1100 branches and 4000 ATMs. The company’s net income was 2.5 billion or $5.87 per share diluted (CIBC Website).

HSBC was opened in Hong Kong in 1865 (Jao, 2003).  Other economic developments followed in the establishment of the Commercial Bank of China (1897), and Hong Kong (1891), and Shanghai (1904), stock exchange. HSBC is a multinational financial institution just as the previously known as City Bank of New York, then First National Bank of New York, and now concisely, Citibank.

The charter of the establishment dates back to 1822 (Shearer, 2005). The early Lower Canadian banks were BMO (1817), the Bank of Canada (1934) and the Bank of Quebec (1818). Early on, BMO was involved in central banking (Bordo, 1990). The organization, whose TSX and NYSE symbol is also BMO, had over a thousand branches and employed nearly 40,000 people in 2010. In that same year, the corporation owned hundreds of billions of dollars in total assets. From an old advertisement of 1921, when the bank’s assets constituted “only” 560 millions, one can see that BMO played an important role in the development and growth of the Canadian medical profession. BMO Financial Group also has a Conference Centre in Toronto, The Bank of Montreal Institute for Learning.

Heritage Thorold LACAC held a designation and plaquing ceremony for The Quebec Bank, built in 1875. Owner George Cottage purchased the property at 28 Front Street South in  late 2009. Jennifer Lillie reports. Uploaded by TVCogecoOntario on Dec 3, 2010. Photo : Megan Jorgensen (Elena).

Sophisticated in its commercial activity, BMO offers highly diversified financial services. The main categories may be conceived of as 3 operating groups (BMO Website). Personal and Commercial Banking defines everyday banking for individuals and enterprises. Private Client Group involves private banking as well as brokerage, insurance and investments. The third division, BMO Capital Markets covers a vast array of areas: equity and debt underwriting and research, corporate lending and project financing, mergers and acquisitions consulting, merchant banking, securitization, treasury and market risk management, derivatives, institutional sales and trading and foreign exchange. Underwriting refers to the decision making process of financial institutions in evaluating client eligibility.

References:

Allee, V. (1997). 12 principles of knowledge management. Training & Development, 51: 71-74.

Bank of Montreal Website: www.bmo.com. Retrieved on February 25, 2011.

Bordo, M.D. (1990). The lender of last resort: Alternative views and historical experience. Economic Review, January/February: 18-30.

Calomiris, C. W. & Gorton, G. (1990). The origins of banking panics: Models, facts and bank regulation. National Bureau of Economic Research’s Conference on Financial Crises: Biscayne, Florida.

Canadian Imperial Bank of Canada Website: www.cibc.com. Retrieved on Frebruary 25, 2011.

Gorton, G. & Huang, L. (2002). Bank panics and the endogeneity of central banking. Journal of Monetary Economics, 53 (7): 1613-1629.

Jao, Y. C. (2003). Shahghai and Hong Kong as international financial centres: Historical perspective and contemporary analysis. Working paper issue 1071: Hong Kong Institute of Economics and Business Strategy.

Shearer, R. A. (2005). Imperial regulation and the constitution of early Canadian banking. Conference of the Canadian Network for Economic History; Kingston, Ontario