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A MATTER OF TRUST: POWER AND PRIVILEGE IN CANADA'S TRUST COMPANIES.

Best, Patricia and Ann Shortell.

Markham (Ont.), Viking, c1985. 352pp, cloth, $24.95, ISBN 0-670-80208-8. Distributed by Penguin Canada. CIP

Grades 10 and up
Reviewed by David Chadwick

Volume 14 Number 2
1986 March


Canadians have traditionally been complacent about their financial institutions. Prior to last year, the most recent bank failure was in 1923. The failed federal bailout of the Canadian Commercial Bank, along with the collapse of more than a dozen trust and loan companies in the last three years, have cost taxpayers billions and forced attention on the regulations (or lack of them) that govern these institutions.

A Matter of Trust is a timely and well-researched look at trust companies in Canada. The Greymac and Seaway Trust Companies' infamous apartment flips in 1982 is the most sensational example of the need for greater regulation of trust companies. Patricia Best and Ann Shortell detail numerous other scandals and questionable practices that point out the need for more governmental control of the industry. Literally hundreds of millions of dollars of taxpayers' money has already been used to arbitrarily bailout uninsured depositors. The authors point out numerous other faults with the system of approving new trust companies and setting limits on their allowed activities. The evolution of trust companies in Canada is traced and the blurring of the differences between trust companies is examined. As well, the wildly exaggerated values of real estate and energy loans that continues to plague many trust companies are analysed. They also discuss how characters such as Peter Pocklington operate. "You use other people's money and other people's labour to build your dreams. You work on people's greed.

The conflicts of interests and self-dealing that has led to many trust company failures and questionable actions will not be stopped by the publication of this book. What the book does in a lively, readable way is to give the average person an excellent grasp of how the trust company industry currently operates and why changes are needed. All in all an impressive, solid piece of investigative journalism.


David Chadwick, Winnipeg, Man.
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