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Sensibilité des banques aux chocs macroéconomiques : La diversification apporte-t-elle toujours des gains ? Cas des banques canadiennes

Author

Listed:
  • Mario Fortin

    () (GREDI, Département d'économique, Université de Sherbrooke)

  • Didelle Dinamona

    () (CREUSET, Université de St-Etienne)

Abstract

This article investigates the sensitivity of Canadian banks to macroeconomic shocks in terms of risk and profitability. We identify the impact of diversification strategy on Canadian banks which are not allowed to enlarge completely their activities. Using a sample of the six largest Canadian banks over the period 1996 to 2006 and panel data methodology, we find that they are sensitive to macroeconomics shocks. Furthermore, our findings suggest that despite the negative impact of non interest income on bank profitability, the six Canadian banks can exploit economies of scale and scope by increasing their size, enabling them to withstand macroeconomic shocks.

Suggested Citation

  • Mario Fortin & Didelle Dinamona, 2008. "Sensibilité des banques aux chocs macroéconomiques : La diversification apporte-t-elle toujours des gains ? Cas des banques canadiennes," Cahiers de recherche 08-24, Departement d'Economique de l'École de gestion à l'Université de Sherbrooke.
  • Handle: RePEc:shr:wpaper:08-24
    as

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    File URL: http://gredi.recherche.usherbrooke.ca/wpapers/GREDI-0824.pdf
    File Function: First version, 2008
    Download Restriction: no

    More about this item

    Keywords

    Canadian banks; diversification; macroeconomic shocks; panel data;

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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