Video Cases - Part III

These questions are based on videos from the Canadian Broadcasting Corporation that accompany the textbook. In addition to whatever in-class use your instructor may have given them, they're available on this website for online viewing. If directed to do so by your instructor, you can answer the questions online and email the results.
     These videos are intended only for students using the 9th Canadian Edition of Macroeconomics. To view the video, you'll require a password. Refer to page 42 in your textbook and use the first word appearing in the main text column as both 'username' and 'password.' Use of the word is case-sensitive.
     The free RealPlayer plug-in is required in order to view the videos. If needed, the plug-in can be downloaded from Real.

This video focuses on a debate between economists Jason Clemens of the Fraser Institute and Douglas Peters. Both agree that mergers can be beneficial to the financial sector and to consumers provided that the banks proceed with caution. However, Peters feels that mergers will reduce competition, resulting in higher prices for consumers.

Concepts/Terms covered: Chartered banks, globalization, financial intermediary, competition, economies of scale and economies of scope, monetary policy.

Required: 1) Watch the video carefully 2) Read the key economic concepts found on pages 3-4 of the text 3) Answer the questions below, either individually or as part of a small group.

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1		The economists in the video both agree that bank mergers can be positive for both consumers and financial institutions. Why do they claim this to be the case? Explain your answer from an economic point of view.
2		What reasons does Douglas Peters give for mergers potentially working against the consumer?
3		(a) How are recent developments due to globalization affecting Canadian financial markets? (b) Do you believe that mergers will help with these developments? Explain.
4		What do you believe would be the effect on credit unions and independent trust companies if chartered banks are allowed to merge?
5		Do you believe that mergers will facilitate or hinder monetary policy? Explain.