Regulatory Changes and New Banking: the Case of Canada
This 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.
|Date of creation:||31 Aug 2004|
|Date of revision:|
|Note:||Type of Document - pdf; pages: 20. Produced with Latex, also available in ps|
|Contact details of provider:|| Web page: http://econwpa.repec.org|
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