Should the CIBC and TD Merge?

Should the CIBC and TD Merge?
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Should the CIBC and TD Merge?
The CIBC (Canadian Imperial Bank of Commerce) and TD (Toronto-Dominion Bank), the second and fifth-ranked banks in Canada, sought to amalgamate under the Bank Act to combine all their operations that provide a broad range of services to businesses and individuals through their national branch networks, credit card operations, and securities firms. Ideally, the merger could lead to significant cost savings. As the banks become larger, plus the cost advantages, it would be efficient to compete effectively in Canada and internationally. However, it is the Competition Bureau's mandate under the Competition Act to assess whether such a merger could lessen or prevent competition substantially by resulting in higher prices, fewer choices, and reduced service. In its comprehensive assessment, the Bureau found that the entry barriers into branch banking are high due to the enormous costs of establishing a branch network, economies of scale and scope, strong brand names of the banks, and the regulatory barriers (The Competition’s Bureau’s letter to the CIBC and TD Bank, 1998). On the other hand, in some respects, technology may have in...