Real output of bank services: What counts is what banks do, not what they own

We argue that models ofbanks as processors of information and transactions imply a quantity measure ofbank output based ontransactioncountsinstead ofbalancesof loans anddeposits. Compiling new and comparable real output measures for the USA and arange of European countries, we show that counts-based output seriesexhibit substantially different growth patterns than balances-basedoutputseries. Since the US official statistics rely on counts while Europeanstatistics rely on balances, this implies that comparisons of bank outputgrowth betweenEurope and the USA are biased.