The Long Shadow of Public Interventions in the Financial Sector

Giovanni Dell’Ariccia (), Deniz Igan, Paolo Mauro, Hala Moussawi, Alexander F. Tieman and Aleksandra Zdzienicka
Additional contact information
Giovanni Dell’Ariccia: IMF
Hala Moussawi: Stanford University
Alexander F. Tieman: IMF
Aleksandra Zdzienicka: IMF

IMF Economic Review, 2022, vol. 70, issue 2, No 2, 212-250

Abstract: Abstract We take stock of the costs of government interventions in the financial sector over the period 2007–2017 and track the assets still under government control. We build a new bank-level dataset on interventions and holding divestitures covering 1114 financial institutions in 37 countries. At end-2017, few countries had fully divested their financial sector holdings. On average, public holdings were divested faster in more capitalized, profitable, and liquid banks. They remained higher in countries where private investment and credit growth grew slower, financial access, depth, efficiency, and competition were worse, and financial stability improved less.

Keywords: Financial crisis; Government interventions; Bank resolution (search for similar items in EconPapers)
JEL-codes: E50 E60 G20 (search for similar items in EconPapers)
Date: 2022
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DOI: 10.1057/s41308-022-00158-8

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