The objective of this study was to explore the historical expansion of the international operations of the Canadian chartered banks; to compare and contrast the exhibited growth pattern with that of the major commercial banks of the United States; to draw implications for the future pattern of world banking; and to see the role of the Canadian banks in that pattern. The analysis was limited largely to the post-World War II era and was conducted primarily in terms of the operating forms employed in other countries by the banks. The foreign-based vehicles described were the representative office, agency, branch, wholly-owned subsidiary, affiliate and multinational joint venture. The approach was essentially qualitative in character with a number of hypotheses introduced to explain the findings but with no effort made to statistically test these hypotheses. Specifically, hypotheses were tendered to account for the exhibited increasing internationalization of the banks; to explain why they go abroad to set up foreign "offices"; to explain why they might choose a particular country or area; and to account for the selection of a particular operating form for this location. The study relied upon several principal sources of information in order to develop the hypotheses offered. Standard governmental publications and the annual reports of the selected Canadian and U.S. banks were significant data sources and a number of articles from various periodicals were found to be especially relevant. Vital information was acquired by correspondence with the selected banks of each country and through personal interviews with executives in the International Divisions of these institutions. To facilitate the investigation of overseas involvement, and to enable more effective comparisons and contrasts to be developed the world was divided into seven geographic regions. It was found that the banks of both countries have experienced increasing internationalization of activity during the past 25 years with the U.S. banks enjoying more extensive "office" representation in other countries. The findings indicated that the greater number of U.S. customers abroad, measured in terms of U.S. foreign direct investment abroad, may be the most important contributory factor. The chartered banks, on the other hand, generally appeared to be motivated more by the volume and direction of Canadian external trade and the value and sources of foreign investment in Canada as the prime forces behind their increasingly "international flavour" and movement into certain countries or areas. The study indicated that bank policy was a pervasive, universal force influencing the exhibited extent of internationalization of the number and variety of "offices" abroad of the individual banks, particularly in terms of the variety of vehicles employed and the locations selected as a base of operations. On the other hand, it was indicated that restrictive Canadian banking legislation may be a force limiting the banking activity of the chartered banks in certain areas while New York and California state legislation has facilitated the overseas expansion of the U.S. banks. The respondents were asked to name the principal persistent problems which their banks experienced during the conduct of their international operations. On the basis of these perceived difficulties and from the findings of the study to that stage implications were drawn concerning the future pattern of international banking particularly as it pertained to the chartered banks. The findings indicated that the trend toward increasing internationalization could be expected to continue for the banks of both countries with the U.S. institutions continuing to be more intensively represented on a wider scale geographically. The range of operating vehicles is not expected to increase but it appears that the affiliate and multinational joint venture may become relatively more important. Significant changes in international operating methods and management techniques are expected to be forthcoming from the increased application of computer technology, especially through the centralization of information. On the other hand, the future can be expected to bring greater decentralization of authority through expanded regional organization. / Business, Sauder School of / Graduate

This thesis is concerned with a discussion of banking clearing gains and losses. Background material covers the history of deposit banking in general and in Canada, a discussion of deposit expansion for a one and a multi-bank system, and the clearing system in use today by the Canadian Chartered Banks. The background material continues with a discussion of the reserve rate in Canada, the rates of the deposit liability of the Canadian Chartered Banks and the method used to determine the required primary reserve each bank must maintain with the Bank of Canada. In respect to the clearing gain or loss figure for any bank, examples are given to show how the net clearing gain or loss for any bank in the short run can be influenced by the spending habits of the banks' customers, the money market transactions of the bank and its customers, the action of the Bank of Canada and the rate of investment growth for any one bank relative to other banks. In the long run customers loyalty is deemed to be the sole factor having effect upon the net clearing gain and loss figures for any one bank. The conclusion states the following two hypotheses. 1. In the short run, clearing gains and losses for any one bank are a function of: the spending habits of the bank's customers; the money market transactions of the bank and its customers; the action of the Bank of Canada; and, the relative rate of investment growth. 2. In the long run clearing gains and losses are a factor of the customers loyalty enjoyed by each bank. An Appendix explains why these hypotheses were not tested and lists the information that would be needed to test them. J. N. Bray. / Business, Sauder School of / Graduate

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This dissertation continues the tradition of identifying the effects of economic shocks to financial intermediaries. Its main contribution is to estimate the size of credit market disruptions in the form of government intervention, asset market crises, and competitive pressures, while using methods that are more novel and appropriate than those of previous work. Chapter 1 examines the effect of the elimination of U.S. banking regulations, which are intended to expand the access of financial services within states and across state-lines, on entrepreneurship activity. It finds that there was increase in small business formation following the deregulation of interstate banking, but not intrastate banking. Results indicate allowing banks to lend and take deposits across state lines increases small business formation by up to 8%. There is a delayed impact following the passage of legislation indicating credit markets require time to adjust to the new regulatory environment. Heterogeneous effects exist across firm sizes in terms of economic impact magnitude and timing. The main contribution of the chapter is that examines the impact on entrepreneurship in separate periods after the initial passing and on subsets of small businesses. Whereas Chapter 1 estimates the effect of a foreseen event, Chapter 2 focuses on the impact of unexpected housing crisis on financial intermediaries loan servicing decisions. As the housing market worsened mortgage lenders could not rely solely on foreclosure processes to reduce losses on homes in default, rather many found the need to engage in modifying loan terms to allow borrowers to continue making mortgage payments. Modifications that increased the affordability of monthly payments were effective at halving the cumulative 36-month redefault rate for mortgages between 2008 and 2011. Findings indicate the improving economy and mortgage risk characteristics are not enough to explain the reduction in redefault. Instead, results find evidence of “learning –by-doing” i.e., servicers become better at targeting borrowers for modification and providing the appropriate payment relief over time. Voluntary government modification programs serve as guidelines for servicers to design and invest in their own modification processes. The impact of this learning by doing is evident before and after controlling for macroeconomic conditions, borrower characteristics, and loan terms. Previous studies do not effectively isolate the improvement in post-modification with an econometric model using a control group similar to this one. Furthermore, other studies consider only particular servicer subsets of mortgage modifications, such as private securitized, whereas the sample here considers all servicer types and payment reducing modifications. Ultimately, the results indicate mortgage modifications were an effective non-foreclosure alternative to keep homeowners in their homes and monthly payments flowing to mortgage servicers. Chapter 3 examines the impact of changes in bank competition on bank capital in the United States. Allen et al. (2011) proposes excessive capital holdings, i.e., capital holdings above regulatory requirements, are attributable to market discipline arising from banks’ asset side. Theory predicts competition incentivizes banks to hold higher levels of capital because this indicates a commitment to monitoring to encourage bank stability. I examine heterogeneous impacts of competition on capital over the business cycle and across bank size. Economic downturns usually bring significant changes to bank concentration, which can cause a different impact than during economic booms. Smaller banks can feel different competitive pressures than larger banks due to a focus on local lending activities. I have two main results. More intense competition is associated with higher bank capital ratios at all times (before, during, and after the financial crisis) for small, medium, and large banks. All banks see a larger impact during the crisis period compared to the pre- and post-crisis periods. The findings of this paper can have significant policy implications for the application of anti-trust regulation, since capital ratios are commonly used to restrain individual and systemic bank risk. / Economics

<p> Over the past 35 years, Great Depression era regulatory restrictions on the geographic area of operation and the scope of financial services banks can offer have change significantly. These changes fueled a surge of merger activity and resulted in a 70% decrease in the number of bank charters by 2015. Currently, community banks hold only 14% of bank assets in the US; nonetheless, they play an important role in the US economy because they continue to provide the majority of funding to small businesses. This study finds that over 83% of bank failures occurred in metropolitan areas despite the distribution of community banks being almost equal at 49.5% rural and 50.5% metropolitan. An analysis of FDIC data from 2000 through 2014 indicates that rural and community banks do differ significantly on variables related to bank profitability and loan portfolio risk. Metropolitan banks have lower ratios on pre-tax return on assets, and return on equity. On average, metropolitan banks are approximately 30% less profitable than their rural counterparts. Since the 2007 financial crisis, on average, metropolitan banks have higher ratios on variables related to loan portfolio risk and since 2010 they have lower capital to asset ratios. The higher bank failure rates, riskier loan portfolios, and lower capital to asset ratios associated with metropolitan community banks provides support for the competition-fragility view that increased competition in banking leads to more bank failures. The nationwide survey in this study indicates that metropolitan community bankers perceive the competitive environment to be more intense and that their marketing capabilities are inferior to the large nationwide and regional banks that they compete against. Community bankers perceive that the merger and acquisition activity will continue and that it is driven by the need to achieve economies of scale in technology and regulatory compliance. Based on previous research that larger banks extend less credit to small businesses, this will further restrict the availability of bank credit to new businesses and existing microenterprises. Given that microenterprises employ the majority of people and contribute to new job creation, there are serious economic implications.</p>

Thesis (PhD.(Economics) North-West University, Mafikeng Campus, 2013

<p> A study on corporate leadership failure in America by Vugt and Ronay has shown that the failure rate of business leadership in meeting profitability targets is as high as 60%. Most organizations fail to attain profitability targets due to limited experience and exposure to strategic leadership. The aim of this single case study design was to explore the role of strategic leadership in banking profitability. Twelve purposively selected senior bankers and members of the board of directors with over 10 years of experience in banking and profitability and 3 years in the top management team participated in the study in western Tanzania. The resource-based view framed the discussion regarding strategic leadership skills needed to enhance banking profitability. Data were collected through semistructured interviews using open-ended questions to elicit in-depth responses from the participants. Other data sources included social media, company websites, and annual reports. The modified van Kaam approach was used in the data analysis. Meaningful statements were grouped into larger units to form themes. Findings confirmed that strategic leadership skills development had an important influence on banking profitability. Five themes emerged from the study results including strategic leadership and organization performance, planning, risk management, training and skills development, and the unique resources. Findings may also help to improve banking profitability, create employment, and contribute to social change to the poor and unbanked communities in Tanzania.</p>

<p> A study on corporate leadership failure in America by Vugt and Ronay has shown that the failure rate of business leadership in meeting profitability targets is as high as 60%. Most organizations fail to attain profitability targets due to limited experience and exposure to strategic leadership. The aim of this single case study design was to explore the role of strategic leadership in banking profitability. Twelve purposively selected senior bankers and members of the board of directors with over 10 years of experience in banking and profitability and 3 years in the top management team participated in the study in western Tanzania. The resource-based view framed the discussion regarding strategic leadership skills needed to enhance banking profitability. Data were collected through semistructured interviews using open-ended questions to elicit in-depth responses from the participants. Other data sources included social media, company websites, and annual reports. The modified van Kaam approach was used in the data analysis. Meaningful statements were grouped into larger units to form themes. Findings confirmed that strategic leadership skills development had an important influence on banking profitability. Five themes emerged from the study results including strategic leadership and organization performance, planning, risk management, training and skills development, and the unique resources. Findings may also help to improve banking profitability, create employment, and contribute to social change to the poor and unbanked communities in Tanzania.</p>