For decades Canadian banking has been both highly concentrated and loosely regulated. It was a system, though, that seemed to work. The quiet was shattered last month with the collapse of two of Canada's 14 banks. They were the country's first bank failures in 62 years. Last week a financial crisis struck a third bank, the Montreal-based Mercantile Bank of Canada, the country's eighth largest, with assets of $4.4 billion (Canadian dollars). Mercantile, which is 24% owned by New York-based Citicorp, has been facing a severe cash squeeze. Investors who would normally buy Mercantile's commercial paper have been buying securities elsewhere....
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