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An Overview Of The Canadian Banking System: 1996 To 2015

Author

Listed:
  • Robert McKeown

    (Queen's University)

Abstract

From 1996 to 2015, total assets at Canadian and foreign banks operating in Canada grew four-times in size. This growth occurred with neither a significant regulatory change, such as the repeal of Glass-Steagall, nor the introduction of new business lines, such as wealth management or investment banking. Using data from CANSIM and a little used dataset from OSFI, I describe how the Canadian banks earn revenue, fund business activities, and pay expenses. The success of the Canadian banking system can be attributed to: i) a focus on retail and branch-level banking, ii) a preference for deposit-financing, and iii) minimizing costs, particularly noninterest expenses. Furthermore, I provide a broad overview of the data, accounting rules, and trends in Canadian banking. Estimating a reduced form model similar to DeBoskey and Jiang (2012), I find no evidence that the Canadian banks manipulated the provision for credit losses to ‘smooth’ earnings.

Suggested Citation

  • Robert McKeown, 2017. "An Overview Of The Canadian Banking System: 1996 To 2015," Working Paper 1379, Economics Department, Queen's University.
  • Handle: RePEc:qed:wpaper:1379
    as

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    File URL: https://www.econ.queensu.ca/sites/econ.queensu.ca/files/qed_wp_1379.pdf
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Bank; Bank Lending; Borrowing; Commercial Banks; Financial Intermediaries; Retail Bank; Canada; Canadian;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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