IDEAS home Printed from https://ideas.repec.org/a/eee/joecas/v6y2009i2p31-46.html
   My bibliography  Save this article

Too Small to Fail: Canadian Banks, Regulation, and the North American Financial Crisis

Author

Listed:
  • Brox, James A.

Abstract

This paper examines the recent performance of Canadian banks in light of the recent North American financial crisis. The extent of the spread of the crisis to the Canadian financial sector is analyzed, and the resulting impacts on the Canadian banks’ balance sheets are studied using information from the Canadian financial flow matrix as published by Statistics Canada. The constrained financial flow model estimated and simulated in this study shows that while there has indeed been some spillover from the United States into the Canadian banking sector, this result is much more modest than in the United States. Some policy issues with respect to tax and regulatory structure are discussed in conclusion.

Suggested Citation

  • Brox, James A., 2009. "Too Small to Fail: Canadian Banks, Regulation, and the North American Financial Crisis," The Journal of Economic Asymmetries, Elsevier, vol. 6(2), pages 31-46.
    • Handle: RePEc:eee:joecas:v:6:y:2009:i:2:p:31-46
    DOI: 10.1016/j.jeca.2009.02.005
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1703494915302693
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.jeca.2009.02.005?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Matthew J. Baker & Thomas J. Miceli & C.F. Sirmans, 2008. "An Economic Theory of Mortgage Redemption Laws," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 36(1), pages 31-45, March.
    2. Paul Mizen, 2008. "The credit crunch of 2007-2008: a discussion of the background, market reactions, and policy responses," Review, Federal Reserve Bank of St. Louis, vol. 90(Sep), pages 531-568.
    3. John D. Wagster, 2007. "Wealth and Risk Effects of Adopting Deposit Insurance in Canada: Evidence of Risk Shifting by Banks and Trust Companies," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 39(7), pages 1651-1681, October.
    4. Murray, John & Schembri, Lawrence & St-Amant, Pierre, 2003. "Revisiting the case for flexible exchange rates in North America," The North American Journal of Economics and Finance, Elsevier, vol. 14(2), pages 207-240, August.
    5. Brox, James A & Maclean, Wendy A, 1986. "The Financial Behaviour of Canadian Private Corporations and Government Enterprise: A Flow of Funds Analysis," Bulletin of Economic Research, Wiley Blackwell, vol. 38(1), pages 49-66, January.
    6. Brox, James A., 2008. "Post-NAFTA Changes in the Financing of Canadian Corporate Activity," The Journal of Economic Asymmetries, Elsevier, vol. 5(1), pages 65-77.
    7. Ewing, Bradley T. & Payne, James E. & Sowell, Clifford, 1999. "NAFTA and North American stock market linkages: an empirical note," The North American Journal of Economics and Finance, Elsevier, vol. 10(2), pages 443-451.
    8. Patrick Van Roy, 2008. "Capital Requirements and Bank Behaviour in the Early 1990: Cross-Country Evidence," International Journal of Central Banking, International Journal of Central Banking, vol. 4(3), pages 29-60, September.
    9. Roley, V Vance, 1983. "Symmetry Restrictions in a System of Financial Asset Demands: Theoretical and Empirical Results," The Review of Economics and Statistics, MIT Press, vol. 65(1), pages 124-130, February.
    10. Carr, Jack L. & Floyd, John E., 2002. "Real and monetary shocks to the Canadian dollar: Do Canada and the United States form an optimal currency area?," The North American Journal of Economics and Finance, Elsevier, vol. 13(1), pages 21-39, May.
    11. Cornwall, John M., 1989. "How d = 3 QCD resembles d = 4 QCD," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 158(1), pages 97-110.
    12. Morag I. Torrance, 2008. "Forging Glocal Governance? Urban Infrastructures as Networked Financial Products," International Journal of Urban and Regional Research, Wiley Blackwell, vol. 32(1), pages 1-21, March.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Ozili, Peterson K, 2022. "Difficult issues in financial regulation for financial stability," MPRA Paper 115783, University Library of Munich, Germany.
    2. James A. Brox, 2010. "Canadian Banks and the North American Housing Crisis," Chapters, in: Benton E. Gup (ed.), The Financial and Economic Crises, chapter 3, Edward Elgar Publishing.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. James A. Brox, 2010. "Canadian Banks and the North American Housing Crisis," Chapters, in: Benton E. Gup (ed.), The Financial and Economic Crises, chapter 3, Edward Elgar Publishing.
    2. Brox, James A., 2008. "Post-NAFTA Changes in the Financing of Canadian Corporate Activity," The Journal of Economic Asymmetries, Elsevier, vol. 5(1), pages 65-77.
    3. Mr. Ayhan Kose & Mr. Roberto Cardarelli, 2004. "Economic Integration, Business Cycle, and Productivity in North America," IMF Working Papers 2004/138, International Monetary Fund.
    4. Andrea Flori & Fabrizio Lillo & Fabio Pammolli & Alessandro Spelta, 2021. "Better to stay apart: asset commonality, bipartite network centrality, and investment strategies," Annals of Operations Research, Springer, vol. 299(1), pages 177-213, April.
    5. Weitzel, Utz & Kling, Gerhard & Gerritsen, Dirk, 2014. "Testing the fire-sale FDI hypothesis for the European financial crisis," Journal of International Money and Finance, Elsevier, vol. 49(PB), pages 211-234.
    6. Gagnon, Marie-Hélène & Gimet, Céline, 2013. "The impacts of standard monetary and budgetary policies on liquidity and financial markets: International evidence from the credit freeze crisis," Journal of Banking & Finance, Elsevier, vol. 37(11), pages 4599-4614.
    7. Hall, Stephen & Foxon, Timothy J., 2014. "Values in the Smart Grid: The co-evolving political economy of smart distribution," Energy Policy, Elsevier, vol. 74(C), pages 600-609.
    8. Ulrich van Suntum, "undated". "Economic Confidence, Negative Interest Rates, and Liquidity: Towards Keynesianism 2.0," Working Papers 200108, Institute of Spatial and Housing Economics, Munster Universitary.
    9. Michal Jurek & Pawel Marszalek, 2014. "Subprime mortgages and the MBSs in generating and transmitting the global financial crisis," Working papers wpaper40, Financialisation, Economy, Society & Sustainable Development (FESSUD) Project.
    10. Highfill Jannett, 2008. "The Economic Crisis as of December 2008: The Global Economy Journal Weighs In," Global Economy Journal, De Gruyter, vol. 8(4), pages 1-7, December.
    11. Ebrahimi Kahou, Mahdi & Lehar, Alfred, 2017. "Macroprudential policy: A review," Journal of Financial Stability, Elsevier, vol. 29(C), pages 92-105.
    12. Fran Tonkiss, 2015. "Afterword: Economies of infrastructure," City, Taylor & Francis Journals, vol. 19(2-3), pages 384-391, June.
    13. van Suntum, Ulrich, 2009. "Economic confidence, negative interest rates, and liquidity: Towards Keynesianism 2.0," CAWM Discussion Papers 24, University of Münster, Münster Center for Economic Policy (MEP).
    14. Tonkiss, Fran, 2015. "Afterword: economies of infrastructure," LSE Research Online Documents on Economics 86717, London School of Economics and Political Science, LSE Library.
    15. von Furstenberg, George M., 2006. "Mexico versus Canada: Stability benefits from making common currency with USD?," The North American Journal of Economics and Finance, Elsevier, vol. 17(1), pages 65-78, March.
    16. Hanna Hilbrandt & Monika Grubbauer, 2020. "Standards and SSOs in the contested widening and deepening of financial markets: The arrival of Green Municipal Bonds in Mexico City," Environment and Planning A, , vol. 52(7), pages 1415-1433, October.
    17. Phillip Anthony O’Hara, 2011. "International Subprime Crisis and Recession: Emerging Macroprudential, Monetary, Fiscal and Global Governance," Panoeconomicus, Savez ekonomista Vojvodine, Novi Sad, Serbia, vol. 58(1), pages 1-17, March.
    18. Gabrisch, Hubert & Orlowski, Lucjan T., 2010. "The Extreme Risk Problem for Monetary Policies of the Euro-Candidates," IWH Discussion Papers 12/2010, Halle Institute for Economic Research (IWH).
    19. Kate Gasparro & Ashby Monk, 2020. "Demystifying “localness†of infrastructure assets: Crowdfunders as local intermediaries for global investors," Environment and Planning A, , vol. 52(5), pages 878-897, August.
    20. Eickmeier, Sandra & Kolb, Benedikt & Prieto, Esteban, 2018. "Macroeconomic effects of bank capital regulation," Discussion Papers 44/2018, Deutsche Bundesbank.

    More about this item

    Keywords

    L5; G21; E44; Financial regulation; Banking; Flow of funds;
    All these keywords.

    JEL classification:

    • L5 - Industrial Organization - - Regulation and Industrial Policy
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:joecas:v:6:y:2009:i:2:p:31-46. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: https://www.journals.elsevier.com/the-journal-of-economic-asymmetries/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.