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Record W2625480488

Returns to scale and fire-sales in the Canadian Banking System

2017· article· en· W2625480488 on OpenAlexaboutno aff
Robert E. McKeown

Bibliographic record

VenueQSpace (Queen's University Library) · 2017
Typearticle
Languageen
FieldEconomics, Econometrics and Finance
TopicBanking stability, regulation, efficiency
Canadian institutionsnot available
Fundersnot available
KeywordsScale (ratio)BusinessRetail bankingFinanceGeography
DOInot available

Abstract

fetched live from OpenAlex

My dissertation is divided into four parts. Chapter one summarizes and analyzes data on the Canadian banking system 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 and a broad overview of the data, accounting rules, and trends in Canadian banking. Chapter two is an in-depth study on cost efficiency and returns to scale (RTS) in Canadian banking, and I estimate a transcendental log cost function for the six largest Canadian commercial banks. To my knowledge, this is the first work to find evidence of constant RTS among the Canadian banks and it is robust to a number of different asset and price specifications. In Chapter three, I compare the U.S. and Canadian banks from 1996 to 2015 and estimate both a trans-log cost function and, for robustness, an input-oriented distance function. Among the ten largest U.S. commercial banks, I find that constant returns to scale best describes the average bank in this period. However, the smaller banks in the sample exhibited increasing RTS but this became exhausted as bank size increased. In Chapter four, I apply a stress test model based on the work of Duarte and Eisenbach (2015) to estimate potential fire-sale losses in the Canadian banking system from 1996 to 2015. I find that the major banks are resilient to all but the most extreme event. This is because (i) Canada has strong macroprudential regulation that improves the quality of assets, (ii) if given a scenario of severe losses, banks retain a sufficient quantity of liquid assets that these could be used to meet short-term liabilities, and (iii) sufficient equity is available to absorb significant losses. However there remain some areas of concern. Using aggregate vulnerability (AV), I find that the Canadian banking system has become more vulnerable to a fire-sale episode since 2011 which could suggest a rising probability of future losses. The concentration of loans-to-households, including residential mortgages and consumer loans, should be of some concern to regulators.

Fetched live from OpenAlex and de-inverted. Abstracts are not stored in this database: the inverted indexes are 8.6 GB of the frame’s 9.3 GB of text, and the host has 13 GB free.

How this classification was reachedexpand

Full frame machine prediction

Teacher imitation

Not calibrated prevalence, not ground truth. Human validation pending. The Gemma side is a direct model label for every work in the frame, read from the title-only record. The Codex side is a classifier learned from the 10,348 direct Codex labels and calibrated to design-weighted sample rates; fields without enough sample support carry no Codex call. Candidate is the union of the two sides; consensus is their intersection. These outputs are machine_predicted_unvalidated and are not human labels.

metaresearch head score (Codex)0.001
metaresearch head score (Gemma)0.008
Version: metacan-v3-hybrid-931329e0061cValidation status: machine_predicted_unvalidated
Candidate categoriesnone
Consensus categoriesnone
DomainCandidate signal: none · Consensus signal: none
Study designCandidate signal: Observational · Consensus signal: Observational
GenreCandidate signal: Empirical · Consensus signal: Empirical
Teacher disagreement score0.962
Threshold uncertainty score0.277

Distilled classifier scores by category (both heads)

CategoryCodexGemma
Metaresearch0.0010.008
Meta-epidemiology (narrow)0.0000.000
Meta-epidemiology (broad)0.0000.001
Bibliometrics0.0020.005
Science and technology studies0.0020.002
Scholarly communication0.0030.001
Open science0.0010.001
Research integrity0.0000.001
Insufficient payload (model declined to judge)0.0060.000

Machine scores (provisional)

The two teacher heads of the student model, read on this work. A score orders the frame for review; it never asserts a category, and the validation status ships verbatim with every row.

Baseline scores from an immature model (maturity gate not passed, 7 training rounds). Scores rank; they never assert a category.

Opus teacher head0.012
GPT teacher head0.179
Teacher spread0.167 · how far apart the two teachers sit on this one work
Validation statusscore_only:v0-immature-baseline · verbatim from the scoring run: score_only means the number may rank works, and no category label ships from it

Classification

machine, unvalidated

Machine predicted; a candidate call from one source (direct Gemma or distilled Codex), not a consensus.

The models applied no category: nothing in the taxonomy fit this work.
Study designObservational
Domainnot available
GenreEmpirical

How this classification was reached, model by model and score by score, is at the end of the page under "How this classification was reached".

Quick stats

Citations0
Published2017
Admission routes1
Has abstractyes

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