Financial industry concentration and financial sector disruption could be the biggest threat to Canada’s financial sector in the next decade.
Financial industry disruption could mean a collapse of the Canadian dollar, and the loss of tens of billions of dollars in revenue, said Dr. Bruce MacDonald, president of the Financial Services and Investment Institute.
“We’ve got a real threat of financial industry disruption,” MacDonald said Monday.
“The big one for Canada is that the global economy is becoming increasingly concentrated and the concentration of capital in the financial sector is getting bigger.
This means that financial services companies are very well-positioned to absorb this kind of capital.”
The Canadian dollar is falling against other currencies in the world, and some analysts say Canada is in for a big hit in the coming years.
The country’s currency fell by more than 1% against the U.S. dollar on Monday.
The U.K. currency also fell against the greenback, with the pound dropping below $1.20 an hour, the same level it has held since the Brexit vote.
The British government has said that the referendum result will impact the future of the country.
“If Brexit is successful, and if it leads to a weaker dollar and a stronger dollar, then you could see the dollar weakening further,” MacDonald told The Canadian Press.
MacDonald said it’s the U-turning from the government’s earlier rhetoric that has the financial and real estate industries concerned.
Many financial firms, he said, have already been laying off staff and looking for new jobs.
MacDonald warned of the potential for more financial disruption.
“The U-Turn is a very dangerous development,” he said.
“We are now seeing the realisation of what’s going to happen.
The realisation that we’re going to have financial sector disruptions in the foreseeable future.”
The financial industry has been a major contributor to the Canadian economy for more than two decades.
It’s been the engine behind the country’s economic growth.