Becoming a Renminbi Hub will Increase Resilience of Canadian Financial Sector-BMO Economics
(firmenpresse) - TORONTO, ONTARIO -- (Marketwired) -- 09/24/14 -- The chance to become the first North American Renminbi (RMB) trading hub represents an opportunity to increase the diversity of business within Canada's financial sector, increasing its resilience, according to a new report from BMO Economics.
"The Canadian economy has performed admirably in the post-global financial crisis world," said Benjamin Reitzes, Senior Economist, BMO Capital Markets. "Canada boasts a stable and well-capitalized financial sector-the banking sector was rated the soundest in the world for the past seven years by the World Economic Forum-a key advantage versus much of the rest of the world. Indeed, financial services have maintained a near-seven per cent share of the economy for nearly a decade, contributing to healthy gains in overall activity.
"That said, new growth opportunities remain a pressing need," continued Mr. Reitzes. "The chance to become the first North American RMB trading hub is just such an opportunity."
Mr. Reitzes stated that the increasing importance of China's economy makes attaining the status of housing the primary location for North American RMB trading particularly attractive. "China's economy has grown dramatically over the past decade with its share of the global economy surging from just 7 per cent in 2000 to over 16 per cent this year. IMF projections show China overtaking the U.S. as the largest economy in the world by the end of the decade, and other measures already suggest China is the largest economy in the world. China's growing clout is evident in foreign exchange markets as well, with the RMB the ninth most traded currency as of April 2013. While the RMB's share was a modest 2.2 per cent of total FX turnover in 2013, that figure had risen from near-zero in less than a decade. RMB trading is a growing business."
Mr. Reitzes also noted that Canada already has a strong trading relationship with China, though there remains significant opportunity for growth. "China is now Canada's second-largest trading partner with activity growing close to a double-digit rate, having already more than doubled over the past decade. Given anticipated solid growth from China throughout the forecast horizon, trade ties should only broaden further. Becoming a North American RMB trading hub could lower costs for Canadian firms dealing with Chinese counterparties, as an increasing share of Chinese trade transactions are being transacted in RMB."
The full report can be downloaded at
About BMO Financial Group
Established in 1817 as Bank of Montreal, BMO Financial Group is a highly diversified financial services organization based in North America. The bank offers a broad range of retail banking, wealth management and investment banking products and services to more than 12 million customers. BMO Financial Group had more than $586 billion in total assets and approximately 47,000 employees at July 31, 2014.
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Datum: 24.09.2014 - 13:35 Uhr
Sprache: Deutsch
News-ID 338692
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TORONTO, ONTARIO
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Commercial & Investment Banking
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