Changes in the Cost of Intermediation: The Case of Savings and Loans

The minimum cost output configuration for a firm may change as the result of a variety of factors, including changes in market structure. In this paper we test this structural change hypothesis with savings and loan data. We find support for the hypothesis that separable, constant returns to scale production functions characterize the average savings and loan in our sample in 1983. This is in contrast to the cost complementarities found in 1978. We argue that this result may be the result of regulatory changes that allowed savings and loans to alter their production mix to fully capture the benefits of joint production.     

Income Inequality and Living Standards: Changes in the 1970s and 1980s

‘This country has the highest standard of living that it has ever known … Real incomes have increased throughout all income groups.’ Margaret Thatcher (Weekly Hansard, 27 April 1989, cols 1087–8) ‘While the very rich have lost some of their riches to the less rich, over time, the poor have hardly profited proportionately.’ Neil Kinnock (The Future of Socialism, Fabian Tract no. 506, January 1986)     

Differential Information and Performance Measurement Using a Security Market Line

An uninformed observer using the tools of mean variance and security market line analysis to measure the performance of a portfolio manager who has superior information is unlikely to be able to make any reliable inferences. While some positive results of a very limited nature are possible, e.g., when there is a riskless asset or when information is restricted to be “security specific,” in general anything is possible. In particular, a manager with superior information can appear to the observer to be below or above the security market line and inside or outside of the mean-variance efficient frontier, and any combination of these is possible.     

Information Diversity and Market Behavior

The paper addresses two major issues raised by information diversity in a speculative market. First, we analyze what property of an investor's information leads to an expected speculative profit and show that independence is more important than accuracy. Second, we consider whether the market price must become fully efficient, in the sense that every investor's information is accurately discounted, when traders use it rationally as an information source. We prove that for any information structure there is a unique equilibrium weighting of investor beliefs at which the price is fully efficient and also every trader's expected profit is zero. Except for special structures, however, this equilibrium need not be attained in finite time.     

The Ontario Securities Commission on Accounting and Auditing from the 1960s to 2008–Part 2: The First Four Chief Accountants, 1986–1996*

This article, Part 2 of a historical review and analysis of the Ontario Securities Commission (OSC), describes the role played by the first four Chief Accountants in the regulation of accounting and auditing from 1986 to 1996. Part 1 dealt with the period from the 1960s to 1985. Part 3 will treat the role played by the fifth Chief Accountant, from 1996 to 2008. As the principal Canadian stock exchange in recent times has been the Toronto Stock Exchange, the OSC has been the most important securities market regulator in Canada. Prior to this article, the academic and professional accounting literature has been largely barren on the OSC’s evolving role on accounting and auditing issues.