Talking about bank mergers in Canada these days is kinda like going to a party in a disco suit. It's just not done anymore - despite the fact that it wasn't all that long ago that people really, really liked that suit.
We can't blame the bankers. They tried for almost a decade before throwing up their hands in frustration and starting to grow their empires outside the country.
Anyway you cut it, Canada's bank regulation is ancient. It wasn't that long ago one required an act of Parliament to found a bank, which really takes the cake as a barrier to entry. And unnecessary barriers to entry are usually quite detrimental.
Canada has also lovingly maintained other ancient legislation about banks, all of which basically boils down to a domestic industry that's flush with cash - hard to compete given the law - and nothing to do with it. To me, this sounds like an easy recipe for stagnation.
Where's the incentive? TD could not make a management decision for five years and still be turning a profit after that time. Mergers are an easy solution. If Canadian banks can become less of bit players on the international scene, that keeps them focused on growth as they compete elsewhere.
Furthermore, mergers would permit the safe opening of our financial markets to foreign institutions, providing the benefits of competition. Heck, it could even end the current stupid debate over the regulation of ATM fees.
The fact that Canada's top banker - David Dodge - is still agitating for mergers only emphasizes the possible gains here. The Tories are supposed to be pro-business, but every governing body should be for gains where there are few losses.
It's well past time for mergers. Start now.