The Federal Reserve regulates U.S. commercial banks using a system of risk-based capital (RBC) regulations based on the Basel Accords. Unfortunately, the Fed’s mis-rating of several assets such as mortgage-backed securities encouraged the build-up of these assets in the banking system and was...

Why did the United States experience a housing and mortgage market boom and bust in the 2000s, while analogous Canadian markets were relatively stable? Both US and Canadian markets are replete with government interventions. In this paper, I account for the US and Canada’s different experiences...