THE IMPACT OF DOMESTIC INVESTORS’ PARTICIPATION IN GOVERNMENT DEBT ON BANK LOANS TO THE PRIVATE SECTOR: A CROSS-COUNTRY STUDY

Justina Adamanti (), Sugiharso Safuan () and Zaäfri Ananto Husodo ()
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Justina Adamanti: Universitas Indonesia, Indonesia; Bank Indonesia, Jakarta, Indonesia
Sugiharso Safuan: Universitas Indonesia, Indonesia
Zaäfri Ananto Husodo: Universitas Indonesia, Indonesia

Bulletin of Monetary Economics and Banking, 2022, vol. 25, issue 3, 275-290

Abstract: This study analyzes the impact of domestic investors’ participation in government debt on bank loans to the private sector in advanced and emerging countries. We find that domestic bank participation in government debt has a more profound negative impact on bank loans to the private sector in advanced than in emerging countries. Meanwhile, domestic non-bank participation in government debt only negatively impacts bank loans to the private sector in emerging countries. While both domestic bank and non-bank participation in government debt have a negative impact on bank loans to the private sector in emerging countries, the latter has a weaker impact.

Keywords: Government debt; Domestic bank investors; Domestic non-bank investors; Bank loans to the private sector; Cross-country (search for similar items in EconPapers)
JEL-codes: G18 G20 G23 (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:idn:journl:v:25:y:2022:i:3a:p:275-290

DOI: 10.21098/bemp.v25i3.2121

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