Canada suffered a major depression from 1929 to 1939. In terms of output, it was similar to the Great Depression in the United States. However, total factor productivity (TFP) in Canada did not recover relative to trend, the in the United States TFP had revered by 1937. We find that the...

We show that interbank markets are a poor substitute for "broad" banks that operate across regions or sectors. In the presence of regional or sectoral asset and liquidity shocks, interbank markets can distribute liquidity efficiently, but fail to respond efficiently to asset shocks. Broad banks...