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dc.contributor.authorDamar, H. Evrenen_US
dc.contributor.authorMeh, Césaire A.en_US
dc.contributor.authorTerajima, Yazen_US
dc.date.accessioned2010-12-30en_US
dc.date.accessioned2011-12-15T12:57:47Z-
dc.date.available2011-12-15T12:57:47Z-
dc.date.issued2010en_US
dc.identifier.urihttp://hdl.handle.net/10419/53892-
dc.description.abstractSome evidence points to the procyclicality of leverage among financial institutions leading to aggregate volatility. This procyclicality occurs when financial institutions finance their assets with non-equity funding (i.e., debt financed asset expansions). Wholesale funding is an important source of market-based funding that allows some institutions to quickly adjust their leverage. As such, financial institutions that rely on wholesale funding are expected to have higher degrees of leverage procyclicality. Using high frequency balance sheet data for the universe of banks, this study tries to identify (i) if such a positive link exists between the assets and leverage in Canada, (ii) how wholesale funding plays a role for this link, and (iii) market and macroeconomic factors associated with this link. The findings of the empirical analysis suggest that a strong positive link exists between asset growth and leverage growth, and the use to wholesale funding is an important determinant of this relationship. Furthermore, liquidity of several short-term funding markets matters for procyclicality of leverage.en_US
dc.language.isoengen_US
dc.publisherBank of Canada Ottawaen_US
dc.relation.ispartofseriesBank of Canada Working Paper 2010,39en_US
dc.subject.jelG21en_US
dc.subject.jelG28en_US
dc.subject.ddc330en_US
dc.subject.keywordFinancial stabilityen_US
dc.subject.keywordFinancial system regulation and policiesen_US
dc.subject.keywordRecent economic and financial developmentsen_US
dc.subject.stwFinanzmarkten_US
dc.subject.stwBanken_US
dc.subject.stwKapitalstrukturen_US
dc.subject.stwKanadaen_US
dc.titleLeverage, balance sheet size and wholesale fundingen_US
dc.typeWorking Paperen_US
dc.identifier.ppn642546894en_US
dc.rightshttp://www.econstor.eu/dspace/Nutzungsbedingungenen_US
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