SecProbe.io

September 25, 2012

Via E -mail
Thomas E. Flynn
Chief Financial Officer
Bank of Montreal
100 King Street West
1 First Canadian Place
Toronto, Ontario
Canada, M5X 1A1

Re: Bank of Montreal
 Form 40-F for the Fiscal Year Ended October 31 , 2011
Filed December 6, 2011
 Form 6-K
Filed August 28, 2012
File No. 001-13354

Dear Mr. Flynn :

We have reviewed your filing s and have the following comments.  We have limited our
review to only your financial statements and related disclosures and do not intend to expand our
review to other portions of your documents.  In some of our comments, we may ask you to provide
us with information so we may better understand your disclosure.

Please respond to this letter within ten business days by amending your f iling, by
providing the requested information, or by advising us when you will provide the requested
response.   If you do not believe our comments apply to your facts and circumstances or do not
believe an amendment is appropriate, please tell us why in yo ur response.

After reviewing any amendment to your filing and the information you provide in
response to these  comments, we may have  additional comments.

Form 40 -F for Fiscal Year Ended October 31, 2011

Exhibit 2 – Management’s Discussion and Analysis

Allowance for Credit Losses, page 84

1. We note your definition of unexpected loss (UL) on page 83 and that you use it both to
assess the extent and correlation of risks before authorizing new exposures and as part of
your allowance for credit  losses model.  Please revise your future filings to address in

Thomas E. Flynn
Bank of Montreal
September 25, 2012
Page 2

 greater detail how you use the “unexpected loss” measure and how your use of an
expected loss methodology in managing your segments interrelates with your
consideration of unexpected loss.  Discuss how your unexpected loss measures have
changed over time, and clearly identify the factors that affect this measure in general as
well as specifically during the periods presented.

Table 3:  Returns on Equity and Assets, page 101

2. We note you p resent return on equity and return on assets in this table.  Please revise your
future filings to also present the average equity to average total assets ratio in this table .

Table 5: Liquid Assets, page 101

3. We note your disclosure on page 89 that li quid assets include  unencumbered, high -
quality assets that are marketable, can be pledged as security  for borrowings, and can be
converted  to cash in a time frame that meets your liquidity and funding requirements.
We also note your liquid assets disclosu re here in Table 5.  Please revise your future
filings to disclose the following:

 Disaggregate your Securities line to disclose the balance by type of securities
included , and if intra -period balances vary significantly, please  disclose the weighted
average balance  as well .

 Clarify whether the Liquid Assets presented in Table 5  represent your “supplemental
liquidity pools” as referenced on page 89 that are maintained for contingent liquidity
risk management purposes , and if not, how those pools rel ate to the assets presented
in Table 5 .

 Please revise your discussions of the supplemental liquidity pools to more clearly
describe  whether you maintain the supplemental liquidity pool at either the parent
company level, or a lower level such as individua l subsidiary, country, or business
unit level.  Consider providing further granular data about these different liquidity
pools.  Briefly discuss how you manage the supplemental liquidity pool levels
between these levels as well as any regulatory requiremen ts for minimum amounts at
various levels.

 You disclose that the definition of your Net Liquidity Position is bas ed on a stressed
scenario.  In future filings, please cons ider disclosing the inputs and assumptions
considered in such a scenario as w ell as to qualitatively discuss  the outputs of suc h
testing.

Thomas E. Flynn
Bank of Montreal
September 25, 2012
Page 3

 Table 9:  Average Assets, Li abilities and Interest Rates, page 104

4. We note you present your deposits by customer and currency, but group all other interest
bearing liabilities together including your subordinated debt,  securities sold but not yet
purchased , and securities lent or so ld under repurchase agreements.  We also note that
your securities sold but not yet purchased and securities lent or sold under repurchase
agreements have accounted for a significant portion of your other liabilities in the past
two years.  Please revise  your future filings to disaggregate these line items in this table.
Also, revise your future filings to disclose the maximum amount of borrowings at any
month -end during the last three fiscal years for securities lent or sold under repurchase
agreements.

Table 11: Net Loans and Acceptances – Segmented Information, page 106

5. We note that the data for the ra tios “gross impaired loans and acceptances as a % of
equity and allowance for credit losses” with and without purchased portfolios by
geographic location was unavailable by country.  Please revise your future filings to
explain why this information is unav ailable by country , and consider presenting the ratios
based on the consolidated level elsewhere in your filing such as  Table 15.

Exhibit 3 – Consolidated Financial Statements

Notes to the Consolidated Financial Statements

Note  4:  Loans, Customers’ Liability Under Acceptances and Allowance for Credit Losses, page
126

6. We note your impaired loans policy that loans guaranteed by the Government of Canada
are not impaired until one year past due.  We also note your policy for w rite-offs of credit
card, consumer installment, other personal, and some small business loans.  In an effort to
provide consistent and significant policy disclosures, please revise your future filings to
include your write -off policy for residential mortga ges as well as  corporate and
commercial loans .    Revise your disclosure on page 131 to disclose the percentage of
loans past due 90 days or more but not impaired that were guaranteed by the Government
of Canada.

Note 26:  Operating and Geographic Seg mentation, page 167

7. We note your disclosure on page 168 that the provisions for credit losses are allocated to
each segment based on applying the expected loss methodology to the loans in that
segment.  You disclose that amounts reported in the Corpor ate Services segment address
the difference between the expected loss methodology and the incurred loss

Thomas E. Flynn
Bank of Montreal
September 25, 2012
Page 4

 methodology, the latter of which is used for your consolidated reporting.  You also
disclose that during Fiscal 2011 you transferred $1 billion of impai red real estate secured
loans from the P&C U.S. segment to Corporate Services and that prior periods were
restated to reflect this transfer.  However, the provisions for credit losses for the P&C
U.S. and the Corporate Services segments for fiscal 2010 and 2009 were unchanged from
the presentation in your 2010 Form 40 -F.  Please address the following:

 Tell and revise the segment footnotes and segment discussions of your MD&A in
your future filings to more clearly explain why the provision s for credit losses were
positive for your Corporate Services segment for Fiscal 2010 and 2009.

 Provide us with a table that quantifies the total adjustment recorded in Corporate
Services to the provision for each of the last three fiscal years under Ca nadian GAAP
as well as for each the comparative nine month  period s ended July 31, 2012 and 2011
under IFRS  that reduces the total provision from an expected loss  model to the
amount recorded under  Canadian  GAAP or IFRS , respectively .  Reconcile this
adjustment to total provision for credit losses allocated to the Corporate Services
segment for each period, and explain any differences.

 Tell us and revise  your future filings to discuss why the provision allocated to
Corporate Services represented 15% and 61% of the total provision in Fiscal 2010
and 2009 if the Corporate Services segment provision only includes the difference in
the expected loss and GAAP models as indicated in your disclosures.

 Tell us if the impaired loans transferred to the Corporate Services segment during
Fiscal 2011 had provisions recorded during the prior periods presented and if so, why
the provision amounts in the P&C U.S. and Co rporate Services segments were not
restated for Fiscal 2010 and 2009 as your sentence on page 168 seems to imply.  To
the extent the Corporate Services segment continues to hold loans, revise your
MD&A segment discussions in  your future filings to separate ly quantify the ending
and average loan balance held and to separately quantify any provisions for credit
losses on the loans in this portfolio to allow the reader to differentiate such amounts
from any negative adjustment for the difference between expect ed losses and incurred
losses on the other loan portfolios.

8. Since you use the expected loss methodology for segment management purposes, revise
your MD&A  in your future filings  to provide the reader with sufficient information to
understand the respecti ve credit trends you are experiencing and allocating to each
segment for segment management purposes.

 Revise the credit quality sections of your document to more clearly address your use
of the expected loss methodology for management purposes.  Differe ntiate this
methodology from the incurred loss methodology used for your consolidated
reporting both at the conceptual level as well as the quantified level in terms of your

Thomas E. Flynn
Bank of Montreal
September 25, 2012
Page 5

 provisions for credit losses and allowance for loan losses.  More clearly explain how
you use the expected loss data for segment management purposes.

 Revise the MD&A of your future annual and interim filings to address the segment
provision amounts in greater detail.

 For each segment clearly address the credit trends experienced a nd expected that are
captured in your segment results, and highlight any changes.  Within these sections,
link these discussions to the consolidated credit quality data provided elsewhere to the
extent possible, and if such linkage is not possible, provide  sufficient credit quality
information in that section to support the provisions and allowances recorded for that
segment.

 Within the section of your MD&A that addresses your Corporate Services segment,
clearly provide the reconciliation from expected l oss methodology to incurred loss
methodology separately from any other adjustments or provisions reported in your
provision for credit losses for that segment.  Further, within this section, link this
information to your overall credit quality discussions elsewhere in the document and
highlight the differences in the credit quality expectations captured in your segmented
expected loss methodology but which cannot be captured in your incurred loss model.
To the extent loan portfolios are held within the Cor porate Services segment in future
periods, provide separate discussions within this section of your MD&A to address
the credit quality trends experienced within those portfolios.

Note 29:  Fair Value of Financial Instruments, page 171

9. We note your valu ation technique disclosures here and in the referenced Notes 3 and 10
of your consolidated financial statements.  Please revise your future filings to provide
more robust disclosure of your valuation techniques, including both the types of models
used and the significant inputs to such models, and provide clear disclosures that match
the model and inputs with the disclosed financial instrument fair value.  Also, disclose
how you validate the prices you receive and rely on for your fair value measurements
from broker quotes or independent pricing services.

Form 6 -K Filed on August 28, 2012

Exhibit 99.1 - Third Quarter 2012 Report to Shareholders

Risk Management, page 11

10. We note on page 12 that on an “actual loss basis ” the provision for credit losses for the
P&C U.S. segment declined by 31% from  C$265 million for the nine months ended July
31, 2011  to C$182 million  for the nine months ended July 31, 2012 .  We also note on
page 53 that your provision for credit losses by geographic region decreased  by 64%  for

Thomas E. Flynn
Bank of Montreal
September 25, 2012
Page 6

 the United States portfolios from C$331 million for the nine months ended July 31, 2011
to C$119 million for t he nine months ended July 31, 2012.  How ever, on page 52 your
provision for credit losses on an expected loss basis for the P&C U.S. segment increased
by 106%  from C$123 million to C$254 million  for the same periods.  Please tell us  and
revise your future filings to  address the following:

 Discuss t he reasons for the significant changes in the provisions for credit losses for
your U.S. Segment under each of these methodologies, identifying the credit quality
indicat ors that reflect the trends underlying these results.

 Quantify t he unadjusted provision for credit losses under IFRS for these U.S.
portfolios.

 As part of your response, please pr ovide us with an allowance rollforward under IFRS
for the loan portfolios in your P&C U.S. segment for the nine month periods
presented.

 In an  effort to provide more transparent disclosure  of your credit quality and related
trends, provid e a tabular presentation of credit quality information by geographic
location including gross  loans  and acceptances , gross impaired loans, allowance for
credit losses, and provision for credit losses  in your future interim filings, or tell us
why you believe such information is not meaningful to investors .

11. Revise this section  in your future filings  to clarify  and differentiate  the terminology used
for the multiple credit loss methodologies you refer to in your disclosure.  For instance,
explain how th e methodology used to arrive at the “adjusted provision” differs from
“actual loss basis” as well as from your segment “expected loss provisions”.  Further,
explain why your “actual loss basis” provision appears to require  further adjustments to
reconcile to your IFRS reported provision for credit losses.  Clearly identify what each
methodology you use here is meant to convey to the reader about your credit quality.

We urge all persons who are responsible for the accuracy and adequacy of the disclosure
in the filing to be certain that the filing includes the information the Securities Exchange Act of
1934 and all applicable Exchange Act rules require.   Since the company and its management are
in possession of all facts relating to a company’s disclosure, they are responsible for the accuracy
and adequacy of the disclosures they have made.

 In responding to our comments, please provide  a written statement from the company
acknowledging that:

 the company is responsible for the adequacy and accuracy of th e disclosure in the filing;

Thomas E. Flynn
Bank of Montreal
September 25, 2012
Page 7

  staff comments or changes to disclosure in response to staff comments do not foreclose
the Commission from taking any action with respect to the filing; and

 the company may not assert staff comments as a defense in any proceed ing initiated by
the Commission or any person under the federal securities laws of the United States.

You may contact Lindsay McCord  at (202) 551 -3417  or me at (202) 551 -3494  if you have
any questions.

Sincerely,

 /s/ Kevin W. Vaughn

Kevin W. Vaughn
Accounting Branch Chief