Over The Edge Page 4

January 10, 2000

Y2K Smy2K

Nicole Larson

Well New Years has
come and gone and
nothing happened.
Sure the automated
ticket system for the
public transit in
Madagascar went a little
crazy and there were
some slot machines in
Delaware that didn’t
know which way was
up, but other than that
nothing happened. All

of you computer pro-
grammers who worked
for months, some for
years, you all give your-
selves a big ol’ pat on
the back, you saved the
world from who knows
how much trouble.

Yes the world is saved
from accidental nuclear
wartare, the total break-
down of the world’s
financial system and the
inability to make coffee,
but did it really need

Saving? | don’t know, |
didn’t understand the
whole Y2K problem to
begin with. | know that it
would not at all be funny
to receive a bill that
says the lights in my
house have been one
since January 1, 1900
and | now have to sell
one of my kidneys on
the black market to pay
BC Hydro, but that didn’t
happen. Good on ya.

There are people com-

LETTERS

plaining about how
computer developers
should have the same
standards that every
other industry does.
Their example, if they
bought a car that would
suddenly explode on a
given date, that car
would be recalled to the
manufacturer quicker
than you could say
spontaneous combus-
tion engine and you can
bet your kidney that you

In Defense of the Banks

There has recently
been an uproar about
the conduct of Canada’s
chartered banks in the
midst of record profits.
People are questioning
why banks are making
phenomenal profits
while still laying off peo-
ple in record amounts.
In order for people to
make an informed deci-
sion as to the quality of
service and ethics of
Canada’s chartered
banks we must look
deeper that just raw
profit numbers.

The largest banks in

Canada in terms of
assets, Canadian
Imperial Bank off
Commerce (CIBC),
Royal Bank,
ScotiaBank, The Bank
of Montreal and the

Toronto Dominion Bank
(TD) each made 1.5,
3.0, 2.1, 2.1 and 1.17
billion dollars respec-
tively in profits in 1999.
These profits look
astounding by them-
selves but we must also
look at how well these
five banks are doing on
the global scene. For
example, in 1984 Royal
Bank was the 22nd
largest bank in the
world whereas CIBC
ranked 39th largest.

Fifteen years later Royal
Bank sits at 57th and
CIBC ranks 55th. CIBC,
the largest bank in
Canada in terms of
assets is only 1/4 the
size of Deutche Bank,
the largest bank in the
world. This obviously
shows that on the glob-
al front, the largest
banks in Canada are
losing ground relative to
other banks around the
world. Is this reflected
in the record profits?
No.

One of the main num-
bers that analysts look
at to evaluate a compa-
ny in the Return on
Equity (ROE).
Calculated by dividing
profits by common equi-
ty, ROE shows the
return that shareholders
are getting for their
investment. For this
ratio a high number is
desired. This ratio has
been on the decline for
both Royal Bank and
the Bank of Montreal
since 1997. In the case
of the Royal Bank, their
ROE has fallen from
19.3% in 1997 to 15.6%
in 1999.

Net interest margins,
which reflect the cost of
lending versus borrow-
ing, is another important

number to look at. The
spread in Canada is
currently 1.8 percent-
age points, versus
approximately 4% in the
United States. The larg-
er the spread the bigger
the profit. This profit
imbalance is again not
reflected when we look
at just profits.

There has also been
concern as to why
NUGSS has a contract
with ScotiaBank rather
and a credit union like
Prince George Savings.
On e belief people have
is that by dealing with
Prince George Savings
we would be putting
more money back into
the community instead
of just giving it over to a
large corporation. This
is simply not true. One
in two working
Canadians holds stocks
or mutual funds which
benefit directly or indi-
rectly in the billions of
dollars banks pay in div-
idends. Charities also
received $80 million in
donations from the six
largest banks in
Canada in 1998 and the
Canadian government
collected $4.5 billion in
taxes during the same
time. These facts plain-
ly show that banks in

Canada are benefiting
from the millions of dol-
lars Banks channel
back to the citizens of
Canada.

The point that | intend-
ed to make with this let-
ter is that Canada’s
banks are not as bad as
everyone thinks. Sure
they're making billions
of dollars per year but
what other company
their size does not make
that much in profits?
When you look deeper
into the numbers you
will see that banks
aren't doing as well as
more people think they
are. The banks attempt-
ed to increase their
global competitiveness
last year with the pro-
posals to merge the 4
largest banks into 2.
The rejection of this pro-
posal has forced them
to take whatever mea-
sures they deem neces-
sary to say competitive
in the ever growing
global village.

Tim Low

Director of Finance and
Operations
Northern
Undergraduate Student
Society

wouldn’t have to pay to
have the engine fixed
so it wouldn’t burst into
flames. Does this
apply? Maybe it does,
maybe it doesn’t. It’s
not as if a home com-
puter malfunction will
end the life of those
near and dear to you.
The computer industry
is young, it’s just work-
ing out the kinks. There
are no rules, because
they just weren’t around

the last time the rules
were invented.

Is it there a problem?
To tell you the truth |
don’t really know. | do
know that nothing out of
the ordinary happened
to my five year old home
computer. | couldn't
make a January 2000
calendar to hang on the
fridge but other than
that it works just fine.

UNBC Student

Joins Battle In
Seattle

The drive down had
been eerily silent. It’s
not often that you can
put Four University stu-
dents into a car, put
them out onto the open
road, and not have the
situation deteriorate into
a scene from a Hunter
S. Thomson novel. But
my companions and |
were not on a journey to
the far reaches of
consciousness, in fact,
we were going in the
opposite direction:
Seattle, and the World
Trade Organization
(WTO). Our intention
was to participate in the
rally and march against
the WTO’s latest round
of talks concerning the
liberalization of trade. It
had been said that this
could be the largest
protest of the century
with activist being flown
in from around the
world, and estimates of
30,000 to 80,000 peo-
ple expected to attend.
With the new millenni-
um just weeks away, we
each sat in the car, pon-
dering to ourselves the
significance and poten-
tial impact of this event,
as well as how it might
unveil over the next 36

hours. For me, as an
activist and a student of
environmental planning,
it had the potential to
radically alter the path
of my future, and my
career. For each of us
in the car, it could rede-
fine our position as citi-
zens living in a sover-
eign and democratic
country, and our ability
to have an effective
voice on the world
stage.

This weighed heavily
on all our minds as we
pulled into Vancouver
for the night. In the
morning, | found myself
being transported into
Seattle as part of a car-
avan of 41 buses from
the Hyatt Regency in
Vancouver. Upon our
arrival we were met at
Memorial Stadium by
20,000 people from
every walk of life, voic-
ing their support for a

plethora of issues.
Labour unions, environ-
menitalists, social

activists, AIDS workers,
health workers, and on
down through the
gamut of issues.

Continued on
Page 5