On Thu, March 12, 1998 at 07:44:34 (-0800) Michael Perelman writes:
>Interesting data. Why would the Canadian and U.S. banks be so much more
>successful in increasing their profitability?
I have a further question: how do you make the leap from profitability
to the size of the stakes purchased, as Mark does? What about the
possibility that the percentage and amount of US govt/commercial
bonds in the various portfolios varied wildly?
If we rank the various countries by commercial bank profitability
90-94, we get Canada, US, UK, Germany, Japan, Italy, France:
Canada 12.1
United States 8.5
United Kingdom 4.9
Germany 2.7
Japan 1.5
France -3.3
Italy -1.2
Is it really true therefore that US commercial banks purchased less US
govt/commercial paper than Canadian banks during this period?
Mark's claim that "the major purchaser of US govt. and commercial
bonds was not Germany or Japan - but the United Kingdom" is not only
wrong by his criteria (Mark probably meant to say "relative to Japan
and Germany"), but it also seems a dubious leap. If I were given a
table as Mark provided and asked to draw conclusions from it, I would
not, in my ignorance, conclude anything about the relative size of
purchases (holdings?) of US govt/commercial paper.
Enlightenment welcomed.
Bill
