Reuters reports that merger negotiations between Bank of Montreal and Bank of Nova Scotia, the fourth largest bank in Canada, have been scuppered as the country's Prime Minister is thought to have simply said 'no'.
Talks are believed to have been going on since the summer after government officials apparently indicated that a merger would not be looked upon unkindly by the Canadian authorities. Jean Chretien, the Canadian Prime Minister, is now thought to have put his foot down and the negotiations have been halted.
The mixed messages that are now coming from the government will clearly confuse the local banking industry. Although it is not known exactly why Chretian is thought to oppose the deal, the smart money is on the fact that he doesn't want the hassle it will no doubt bring during his final year in office when he clearly has other things on his mind.