00000nam 2200000zi 4500 9.903647 CaOODSP 20221107180321 m o d f cr cn||||||||| 210927t20212021oncd ob f000 0 eng d CaOODSP eng rda CaOODSP FB3-5/2021-44E-PDF Beganau, Juliane, author. A Q-theory of banks / by Juliane Beganau, Saki Bigio, Jeremy Majerovitz and Matias Vieyra. Ottawa, Ontario, Canada : Bank of Canada = Banque du Canada, 2021. ©2021 1 online resource (iii, 52 pages) : graphs. text txt rdacontent computer c rdamedia online resource cr rdacarrier Staff working paper = Document de travail du personnel, 1701-9397 ; 2021-44 "September 24, 2021." Cover title. Includes bibliographical references (pages 39-44). "We document five facts about banks: (1) market and book leverage diverged during the 2008 crisis, (2) Tobin's Q predicts future profitability, (3) neither book nor market leverage appears constrained, (4) banks maintain a market-leverage target that is reached slowly, and (5) pre-crisis, leverage was predominantly adjusted by liquidating assets. After the crisis, the adjustment shifted towards retaining earnings. We present a Q-theory where notions of leverage differ because book accounting is slow to acknowledge loan losses. We estimate the model and show that it reproduces the facts. We examine counterfactuals where different accounting rules produce novel policy tradeoffs"--Abstract, page iii. Financial institutions. Financial leverage. Institutions financières. Effet de levier. Bank of Canada, issuing body. Staff working paper (Bank of Canada) 1701-9397 ; 2021-44. (CaOODSP)9.806221 PDF 2.76 MB https://publications.gc.ca/collections/collection_2021/banque-bank-canada/FB3-5-2021-44-eng.pdf