This paper explores factors behind Canadian banks' relative resilience in the ongoing credit turmoil. We identify two main causes: a higher share of depository funding (vs. wholesale funding) in liabilities, and a number of regulatory and structural factors in the Canadian market that reduced...

Intro -- Contents -- I. INTRODUCTION -- II. THE BASIC MODEL -- III. SIMULTANEOUS VERSUS SEQUENTIAL LIQUIDITY SHORTAGES -- IV. EARLY VERSUS LATE BAILOUTS -- V. POLITICAL ECONOMY -- VI. EXTENSIONS -- VII. CONCLUSIONS -- References.