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Regulatory Changes and New Banking: the Case of Canada

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  • Christian Calmès

    (Université du Québec en Outaouais)

Abstract

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.

Suggested Citation

  • Christian Calmès, 2004. "Regulatory Changes and New Banking: the Case of Canada," Finance 0408011, University Library of Munich, Germany.
    • Handle: RePEc:wpa:wuwpfi:0408011
    Note: Type of Document - pdf; pages: 20. Produced with Latex, also available in ps
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    References listed on IDEAS

    as
    1. Stiroh, Kevin J, 2004. "Diversification in Banking: Is Noninterest Income the Answer?," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 36(5), pages 853-882, October.
    2. Charles Freedman, 1998. "The Canadian Banking System," Technical Reports 81, Bank of Canada.
    3. Charles Freedman & Clyde Goodlet, 1998. "The Financial Services Sector: Past Changes and Future Prospects," Technical Reports 82, Bank of Canada.
    4. Charles Freedman & Walter Engert, 2003. "Financial Developments in Canada: Past Trends and Future Challenges," Bank of Canada Review, Bank of Canada, vol. 2003(Summer), pages 3-16.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Indirect finance; non-interest income; regulatory changes;
    All these keywords.

    JEL classification:

    • G - Financial Economics

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