Regulatory Changes and New Banking: the Case of Canada
AbstractThis paper documents some stylized facts about Canadian banking. I explore these empirical facts in the context of the Canadian financial legislation. I find that, over the 1990s, Canadian businesses became more heavily dependent on financial markets as their primary source of external funding. Data display a trend towards a more ``market- oriented'' financial system. The analysis also suggests that this new trend started after the 1980 banking legislation amendments. The trend was considerably accentuated after the 1992 amendments. I construct a new series for market-oriented activities of Canadian banks that converts the non-interest income of banks into an asset equivalent. Combined with other evidence, this credit equivalent series suggests a healthy growth trend in banking. Financial institutions are broadening their business lines and participating more actively in the arrangement of market financing, a phenomenon that could be called new banking.
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Bibliographic InfoPaper provided by EconWPA in its series Finance with number 0408011.
Length: 20 pages
Date of creation: 31 Aug 2004
Date of revision:
Note: Type of Document - pdf; pages: 20. Produced with Latex, also available in ps
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Indirect finance; non-interest income; regulatory changes;
Find related papers by JEL classification:
- G - Financial Economics
This paper has been announced in the following NEP Reports:
- NEP-ALL-2004-09-05 (All new papers)
- NEP-BEC-2004-09-05 (Business Economics)
- NEP-REG-2004-09-05 (Regulation)
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