THE UNITED-STATES BANKING SYSTEM FROM A NORTHERN EXPOSURE - STABILITYVERSUS EFFICIENCY

This article asks whether the vaunted comparative stability of the Can adian banking system has been purchased at the cost of creating an oli gopoly. We assembled a data set that compares bank failures, lending r ates, interest paid on deposits, and related variables over the period 1920 to 1980. Our principal findings are (1) interest rates paid on d eposits were generally higher in Canada; (2) interest income received on securities was generally slightly higher in Canada; (3) interest ra tes charged on loans were generally quite similar; and (4) net rates o f return to equity were generally higher in Canada than in the United States.