Scotiabank urges bank ownership overhaul

TORONTO Jan 14 (Reuters) - The chief executive of Bank of Nova Scotia (BNS.TO), Canada's third-largest bank, said on Monday that Ottawa should eliminate foreign and other ownership limits for banks and rely on the finance minister's discretion to assess foreign investments in the sector.

"Canada needs to orient a range of policies -- market structure, competition, investment, trade -- toward strategic sectors and the ability of firms to succeed as truly global competitors," Scotiabank CEO Rick Waugh said in a submission sent to a federal competition policy review panel.

"Eliminating the sectoral protections in financial services could increase the competitiveness of the market and maintain the legitimate goal of Canadian ownership of the banking system which, as in other jurisdictions, does not imply that all banks have to be Canadian owned," he said.

Scotiabank called on policy makers to take a global perspective in developing legislation and regulation to drive greater international competitiveness.

It praised the Canadian government's pursuit of bilateral and regional trade agreements, recommending that the current trade and investment focus of the federal government on the Western Hemisphere become a long-term strategy.

"This means a stronger push, not only in trade and investment initiatives, but across Canada's foreign policy, for more integrated relationships in North America, Central and South America and the Caribbean," Waugh said.

In December, when Scotiabank released its fourth-quarter results, it said profit at its international operations, which include businesses in Mexico, South America, and the Caribbean, increased 32 percent in the quarter.

The minority Conservative government created the panel last summer to get feedback on competition and investment policies and what changes should be made.

Mergers in Canada's banking sector have been on hold since 1998, when the then-Liberal government quashed two separate proposals.

The review panel, led by former BCE Inc (BCE.TO) executive Lynton "Red" Wilson, is due to report back to the government this summer with proposals to update competition and investment laws. (Reporting by John McCrank; Editing by Peter Galloway)