As Canada seeks massive new investment in strategic industries, the Canadian Forum for Financial Markets (CFFiM) paper, authored by Thomas Kalafatis, Too Big to Challenge? Has Canada’s Big Bank Model Killed the Geese that Lay the Golden Eggs? considers strengthening the financial-market structure that turns capital into growing Canadian companies.

Canada’s largest banks are credited with providing decades of economic stability.

This paper explores a structure that delivered substantial benefits to Canada and by doing so, has, over time, produced incentives that no longer fit the critical function equity capital markets play in financing the next generation of Canadian companies.

The paper also recommends effective mechanisms for enhancing market incentives for ownership and reinvestment. It considers the carve out of equity capital markets activities, including investment banking, into independently managed, Canadian-headquartered businesses through domestic and foreign institutional investment, with continued involvement by, and to the benefit of, Canada’s largest banks.

As Canada is focused on attracting investment, this paper raises equally important considerations to ensuring Canada has the capital market capacity to transform that investment into Canadian enterprise.