The role of state-owned banks in crises: Evidence from German banks during COVID-19

Xiang Li

No 6/2022, IWH Discussion Papers from Halle Institute for Economic Research (IWH)

Abstract: By adopting a difference-in-differences specification combined with propensity score matching, I provide evidence using the microdata of German banks that stateowned savings banks have lent less than credit cooperatives during the COVID-19 crisis. In particular, the weaker lending effects of state-owned banks are pronounced for long-term and nonrevolving loans but insignificant for short-term and revolving loans. Moreover, the negative impact of government ownership is larger for borrowers who are more exposed to the COVID-19 shock and in regions where the ruling parties are longer in office and more positioned on the right side of the political spectrum.

Keywords: bank credit; COVID-19; state-owned banks (search for similar items in EconPapers)
JEL-codes: D72 G21 P16 (search for similar items in EconPapers)
Date: 2022, Revised 2022
New Economics Papers: this item is included in nep-ban and nep-fdg
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:zbw:iwhdps:62022

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