Terry Campbell, the new head of the Canadian Bankers Association, is taking over the top spot at the advocacy group at a crucial time for the banking sector, with change looming on multiple fronts. From grappling with new international banking rules to major shifts in trading and securities regulations at home, Canada’s biggest financial institutions are facing a host of challenges.

But Campbell, with deep experience in banking policy, says that CBA members are dealing from a position of strength, having recently demonstrated that they are among some of the best-run banks in the world.

“Unlike in other jurisdictions around the world, there were no bank failures in Canada,” says Campbell, president and CEO of the Toronto-based CBA. “Our banks were able to continue to lend, and did continue to lend, through the crisis.”

Nevertheless, it’s fair to say that Canadians are often ambivalent about this country’s big banks and their reach into most areas of the Canadian economy. Over the months ahead, Campbell plans to continue to meet with CBA members, federal officials, regulators and third-party groups to get a sense of where stakeholders stand on the CBA and the banking sector.

“I have been, and will be for awhile, in listening mode,” Campbell says. “After that, I want to process and think that through, to help me settle on an agenda.”

Campbell, 58, took over the reins of the CBA in March, replacing Nancy Hughes Anthony, who retired after four years in the role. Campbell is no stranger to the CBA, having worked in the organization since 1997, most recently serving as vice president of policy. He also spent 16 years in the Ontario public service, where he worked on policy issues related to provincially regulated financial services such as insurance, credit unions and securities.

Campbell will have his plate full dealing with an almost unprecedented range of policy files affecting the 52 bank members that belong to the CBA, representing 260,000 employees. There’s the Bank Act, which is currently under its mandatory five-year review; the debate over a national securities regulator; new U.S. reporting regulations that will affect Canadian banks; and the long-standing fight between banks and the insurance industry over restrictions on the marketing and selling of insurance through bank branches.


There are some big issues on which the CBA must sit on the sidelines while its individual members pursue their respective interests. For example, the CBA remains neutral in the debate over the proposed merger of Toronto-based TMX Group Inc. and London Stock Exchange Group PLC, and the subsequent offer for TMX by a consortium of Canadian banks and pension funds. (See story on page 10.)

“This is a business transaction,” Camp-bell says. “And given the fact our members have different views, this is something that the CBA hasn’t been commenting on.”@page_break@One of the top priorities for the CBA is the new set of global banking regulations, known as Basel III. While Canadian banks don’t anticipate problems meeting the capital and other requirements in the new rules, the CBA is in close touch with the Office of the Superintendent of Financial Institutions in Ottawa and other stakeholders regarding the implementation of Basel III.

Mostly, the CBA is happy with Canada’s response to international banking regulators. The chief concern now for Canada’s banking sector is the final shape of Basel III regarding issues such as timing of the deadlines to meet the new capital requirements.

“We have to be very careful that the regulatory system does not overshoot and somehow impede our ability to compete internationally,” Campbell says. “[Basel III] is a work-in-progress; it’s a moving file. [And that’s why] we’re in continuing dialogue with our regulators.”

The CBA also is concerned about pending legislation in the U.S. — the so-called U.S. Foreign Account Tax Compliance Act, in force Jan. 1, 2013 — that will impose a 30% withholding tax on the U.S.-source income of foreign financial institutions. In order to avoid the tax, a foreign bank must provide U.S. authorities with the names and account information of all American accountholders with more than US$50,000 held in that institution.

The CBA has been in talks with the Canadian and the U.S. governments to ameliorate some of the effects of FATCA. “We’re very sympathetic to the motivation of the U.S. government: they want to make sure U.S. citizens pay the taxes they’re supposed to pay,” Campbell says. “It’s the means by which they’ve chosen to go down that road; we find it an extraordinarily complex and unnecessarily costly set of rules that bypass processes and procedures that are already in place.”

In Canada, the CBA remains a strong supporter of a single national securities regulator, a federal initiative that is still a long way from being realized.

Another frustrating issue is the limitations imposed on banks on selling insurance through branches. “We remain of the view that the restrictions on choice, the restrictions on competition, do not make sense for the consumer.” The CBA continues to argue its case, but Campbell concedes it hasn’t made much progress. “The government has made its position very clear. I don’t see them changing that in the near term.”

One area where the CBA expects relatively little change is the upcoming review of the Bank Act. The feds have said that, considering the range of regulatory change the banking sector has already undergone during the recent financial crisis, they want this review to focus solely on technical tweaks.

Campbell also wants to focus on one of the CBA’s key initiatives — promoting financial literacy, particularly in schools. “The federal, provincial and territorial governments should all be working together to make sure financial literacy is in the curriculum,”Campbell says.

Campbell, who has degrees in history from Queen’s University and the University of Toronto, volunteers with mentoring programs that assist recent immigrants. He lives in Guelph, Ont., and is married with two adult children. IE