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The effect of the US subprime crisis on Canadian banks

Satiprasad Bandyopadhyay, Ranjini Jha and Duane Kennedy

Advances in accounting, 2017, vol. 36, issue C, 58-74

Abstract: We examine whether the Canadian banking sector was afflicted by financial contagion from the 2008 subprime crisis in the United States financial sector. We find that Canadian banks were affected by contagion, though those with higher liquidity withstood better its adverse effects. Our results indicate that Canadian banks that had more transparent asset practices appear to be less adversely affected by contagion. However, higher levels of real estate-related assets including mortgage-backed securities worsened the impact of contagion.

Keywords: Financial crisis; Contagion; Asset quality (search for similar items in EconPapers)
JEL-codes: G01 G21 (search for similar items in EconPapers)
Date: 2017
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DOI: 10.1016/j.adiac.2016.08.005

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