The universal banking feedback effet: U.S. and Canada evidence

Christian Calmès () and Raymond Théoret ()
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Christian Calmès: Chaire d'information financière et organisationnelle ESG-UQAM, Laboratory for Research in Statistics and Probability, Université du Québec (Outaouais)
Raymond Théoret: Chaire d'information financière et organisationnelle ESG-UQAM, Université du Québec (Montréal), Université du Québec (Outaouais)

RePAd Working Paper Series from Département des sciences administratives, UQO

Abstract: Bank non-traditional business lines have significant feedback effects on both economic activity and the stock market. These effects appear in the non-interest income series after 1997 strucutral break. Based on U.S. and Canadian data, we find that the banking cycle tends to lead the business cycle in both countries over the whole sample period (frist quarter of 1984 to last quarter of 2013), and particularly in the last decades. Despite these results, the impact of monetary policy on net interest income remains surprisingly stable after the emergence of universal banking.

Keywords: Universal banking; Banking cycle; VAR; feedback effects. (search for similar items in EconPapers)
JEL-codes: C32 G20 G21 (search for similar items in EconPapers)
Pages: 32 pages
Date: 2016-01-23
New Economics Papers: this item is included in nep-ban
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