Why Are Canadian Banks More Resilient?
AbstractThis paper explores factors behind Canadian banks'' relative resilience in the ongoing credit turmoil. We identify two main causes: a higher share of depository funding (vs. wholesale funding) in liabilities, and a number of regulatory and structural factors in the Canadian market that reduced banks'' incentives to take excessive risks. The robust predictive power of the depository funding ratio is confirmed in a multivariate analysis of the performance of 72 largest commercial banks in OECD countries during the turmoil.
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Bibliographic InfoPaper provided by International Monetary Fund in its series IMF Working Papers with number 09/152.
Date of creation: 01 Jul 2009
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- John Kiff, 2009. "Canadian Residential Mortgage Markets," IMF Working Papers 09/130, International Monetary Fund.
- Paul Goldsmith-Pinkham & Tanju Yorulmazer, 2010. "Liquidity, Bank Runs, and Bailouts: Spillover Effects During the Northern Rock Episode," Journal of Financial Services Research, Springer, vol. 37(2), pages 83-98, June.
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"The Dark Side of Bank Wholesale Funding,"
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"Interbank lending and systemic risk,"
Board of Governors of the Federal Reserve System (U.S.), pages 733-765.
- Calomiris, Charles W & Kahn, Charles M, 1991. "The Role of Demandable Debt in Structuring Optimal Banking Arrangements," American Economic Review, American Economic Association, vol. 81(3), pages 497-513, June.
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