Royal Bank of Canada president and CEO Gordon Nixon praised the U.S. government’s proposed US$700-billion bailout plan on Friday, calling it a positive development that could speed up consolidation and restructuring in the U.S. retail-banking sector.

“It will help unclog what is today a congested banking system and provide greater transparency, thereby enabling the system to recapitalize and restructure,” Nixon told investors in a Webcast presentation.

He called the current operating environment for financial institutions far more difficult than “even the most bearish or pessimistic analyst would have predicted” a year ago.

But despite the challenges, market turmoil has also presented opportunities for growth, Nixon said. In the next 12 months, RBC anticipates opportunities for acquisitions in retail banking or wealth management to arise in the U.S. or abroad.

On the topic of auction-rate securities, Nixon said he hopes RBC will soon reach a resolution soon with the U.S. Securities and Exchange Commission, which is reportedly investigating the bank’s role in the collapse of the auction-rate securities market.

In April, the bank’s U.S. retail clients held about $1 billion of auction-rate securities in accounts with RBC. That amount has since declined, as investors have redeemed the securities.

The bank plans to repurchase the remaining outstanding securities to assist retail investors with their liquidity once discussions with the regulators wrap up.

“This process takes time,” he said.

Nixon expects the impact of the repurchase on RBC to be “negligible” based on estimates of the difference between the par value and the current value.

When asked about the bank’s financial exposure to Washington Mutual Inc. during a question and answer period in the Webcast presentation, RBC representatives called its exposure “very small.”