Abstract
The restructuring of financial markets and financial institutions through bank mergers has been accompanied in many countries by concerns about the resulting `geography of finance’. In Canada, two proposed mergers involving four of the largest banks have raised concerns about the possibleimpacts of the proposed mergers on the access to financial institutions in rural Canada. This paper assesses the potential impact of the proposed mergers on the geography of finance in rural communities in British Columbia. The methodological choices which must be made to frame such an anlysis are discussed and include choices related to the definitions of `accessibility’, the `industry’, a `competitive industry’, a `bank branch’ and a `community’. A new Index is devised to measure the vulnerability of rural communities to post-merger bank branch closures. It is concluded that the bank mergers will, if approved, have significant negative impacts for the accessibility of the banking system in rural British Columbia. It is also suggested that Canada needs to examine establishing a wider regulatory framework which addresses the issue of accessibility on a longer term basis.
This is a preview of subscription content, log in via an institution to check access.
Similar content being viewed by others
References
Amel, D. and Liang, N.: 1997, ‘Determinants of entry and profits in local banking markets’, Review of Industrial Organization’ 12(1), pp. 59–78.
Barrados, A.: 1998, Banking on Consumer Power: The Issues for a Canadian Consumer Coalition for the Banking Industry. (Public Interest Advocacy Centre and the Consumers’ Association of Canada, Ottawa).
Canadian Payments Association: 1998, Directory of Financial Institutions: Volumes 1, 2, 3 (Bowne, Toronto).
CCRC: 1997, An Accountability System for Financial Institutions in Canada: How to Ensure they Meet a High Standard of Performance, December, Position Paper No 5.
Canadian Federation of Independent Business (CFIB): 1997, Submission to the Task Force on the Future of the Canadian Financial Services Sector, October 31.
CFIB: 1998, ‘In the net’, CFIB Report, June.
Competition Bureau: 1998, ‘The merger enforcement guidelines as applied to a bank merger’, mimeograph.
Credit Union Central of Canada: 1997, Submission to the Task Force on the Future of the Canadian Financial Services Sector, October.
Frame, S. and Kamerschen, D.: 1997, ‘The profit-structure relationship in legally protected banking markets using efficiency measure’, Review of Industrial Organization 12(1), pp. 9–22.
Informetrica Ltd.: 1998, ‘Current banking issues: A discussion paper’, Report Prepared for the British Columbia Ministry of Small Business, Tourism and Culture, May 22.
Jackson, W.: 1997, ‘Market structure and the speed of price adjustments: Evidence of non-monotonicity’, Review of Industrial Organization 12(1), pp. 37–58.
Leyshon, A. and Pollard, J.: 1998, ‘Globalization, conventions of restructuring and the reorganization of retail banking: Evidence from the United States and Britain’, mimeograph.
Leyshon, A. and Thrift, N.: 1995, ‘Geographies of financial exclusion: Financial abandonment in Britain and the United States’, Transactions of the Institute of British Geographers 20, pp. 312–341.
Marisco, R.: 1996, ‘The new community reinvestment act regulations: An attempt to implement performance-based standards’, Clearinghouse Review 29(11), pp. 1021–1033.
Nathan, A. and Neave, E.: 1989, ‘Competition and contestability in Canada’s financial system: Empirical results’, Canadian Journal of Economics 22(3), pp. 576–594.
National Community Reinvestment Coalition: 1996, The new community reinvestment act (CRA) regulation (NCRC, Washington D.C.) May 20.
New Economics Foundation: 1997, Financial Exclusion in London (NEF, London).
Option Consommateurs: 1998, Les Portes Closes, Report Prepared for Industry Canada, June.
Rhoades, S.: 1996, ‘Competition and bank mergers: directions for analysis from available evidence’, The Antitrust Bulletin 41(2), Summer, pp. 339–364.
Rhoades, S.: 1997, ‘Research on IO topics in banking: An introduction and overview’, Review of Industrial Organization 12(1), pp. 1–8.
Royal Bank: 1997, Submission to the Task Force on the Future of the Canada Financial Services Sector, October 30.
Shaffer, S.: 1989, ‘Competition in the U.S. Banking Industry’, Economic Letters 29, pp. 321–323.
Shaffer, S.: 1993, ‘A test of competition in Canadian banking’, Journal of Money Credit and Banking 25(1), pp. 49–61.
Statistics Canada: 1997, A National Overview: Population and Dwelling Counts (Statistics Canada, Ottawa).
Statistics Canada: 1998, ‘Deposit-accepting institutions: Activities and economic performance 1996’, Statistics Canada Daily, July 8.
Vesala, J.: 1995, ‘Banking industry performance in Europe: Trends and issues’, in The New Financial Landscape, O.E.C.D.
Wallis Committee: 1997, Final Report of the Financial System Inquiry, Government of Australia.
Author information
Authors and Affiliations
Rights and permissions
About this article
Cite this article
Bowles, P. Assessing the Impact of Proposed Bank Mergers on Rural Communities: A Case Study of Bbritish Columbia. Social Indicators Research 51, 17–39 (2000). https://doi.org/10.1023/A:1006935709125
Issue Date:
DOI: https://doi.org/10.1023/A:1006935709125