Royal Commission on Banking and Finance

Banking and Finance, Royal Commission on

Banking and Finance, Royal Commission on (Porter Commission), established 1961 (after the governor of the Bank of Canada, James COYNE, had publicly disagreed with the federal government's economic policies), to examine and to make recommendations for the improvement of "the structure and methods of operations of the Canadian financial system, including the banking and monetary system and the institutions and processes involved in the flow of funds through the capital markets."

The commission, which included several representatives of BANKING institutions, made many recommendations in its 1964 report, including the abolition of the 6% interest rate ceiling on bank loans; disclosure of bank-loan costs; entry of banks into conventional mortgage financing; and legislation to prevent banks from agreeing to set common interest rates, chequing costs and other customer charges. It also recommended that trust companies, finance companies, creditors and other "near-banks" be brought under the authority of the BANK OF CANADA; that the BANK ACT be amended so that the government could overrule the central bank on MONETARY POLICY; and that government regulations be established to control mergers between banks and TRUST COMPANIES or bank takeovers of other financial institutions. Some of the recommendations were incorporated into the 1967 Bank Act revisions.