nments differ in notable ways: in economic geography, in regulatory architecture, in patterns of interbank competition, and in governmental organization. Although not experimentally controlled, such differences can be measured and interpreted as treatments applied to "experimental" and "control" groups. By analyzing the effects of putative policy treatments, we hope to assemble a body of tested empirical evidence about how variations in a country's competitive and regulatory structure affect bank risk and return. Historically, banking-policy environments in the selected countries differed in four important ways. First, the U.K. had world-class banks and a strong central bank throughout the period of observation. The Canadian and U.S. banking and regulatory environments lag the U.K. in these respects. Second, until relatively recently, the Bank of England tolerated collusive activity and disciplined banks through clubbish moral suasion and informal contacts. Third, efforts to divide re
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