TY  - JOUR
AU  - Bordo,Michael D.
AU  - Redish,Angela
TI  - A Comparison of the Stability and Efficiency of the Canadian and        American Banking Systems 1870-1925
JF  - National Bureau of Economic Research Historical Working Paper Series
VL  - No. 67
PY  - 1996
Y2  - November 1996
UR  - http://www.nber.org/papers/h0067
L1  - http://www.nber.org/papers/h0067.pdf
N1  - Author contact info:
Michael D. Bordo
Department of Economics
Rutgers University
New Jersey Hall
75 Hamilton Street
New Brunswick, NJ 08901
Tel: 732/822-7152
Fax: 732/932-7416
E-Mail: bordo@econ.rutgers.edu

Angela Redish
Department of Economics
University of British Columbia
#997 1873 East Mall
Vancouver BC V6T 1Z1 CANADA
E-Mail: anji@econ.ubc.ca
AB  - In this paper we compare the performance of the U.S. and Canadian banking systems from 1870-1925 in terms of stability and efficiency. In an earlier study we found that the Canadian banking system, based on nationwide branch banking, dominated the U.S. system, based on unit banking, on both criteria in the period 1920-1980.  In this study we find that there is little significant difference between the two systems in the preceding 50 years.  The difference between the two periods we attribute to the merger movement in Canada after 1900 which allowed the Canadian banking system to evolve from a system with incomplete regional diversification, and hence subject to a significant risk of an occasional failure by a large bank, to one characterized by national diversification and greater stability.  The greater stability in turn allowed the financial structure of the banking system to evolve in a more efficient direction.
ER  -