Economics at your fingertips  

The objective function of government-controlled banks in a financial crisis

Yoshiaki Ogura ()

Journal of Banking & Finance, 2018, vol. 89, issue C, 78-93

Abstract: We present evidence that government-controlled banks (GCBs) significantly increased their lending to small and medium-sized enterprises (SMEs) whose main bank was a large bank in the 2008–09 financial crisis. Further analyses show that the weak relationship between large banks and SMEs is a major cause for this phenomenon. The mixed Cournot oligopoly model with relationship banking, where profit-maximizing private banks and a welfare-maximizing GCB coexist, shows that this finding is consistent with the welfare maximization by a GCB rather than its own profit maximization.

Keywords: Government-controlled banks; Mixed oligopoly; Relationship banking; Small business financing (search for similar items in EconPapers)
JEL-codes: G21 H44 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4) Track citations by RSS feed

Downloads: (external link)
Full text for ScienceDirect subscribers only

Related works:
Working Paper: The Objective Function of Government-controlled Banks in a Financial Crisis (2016) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link:

Access Statistics for this article

Journal of Banking & Finance is currently edited by Ike Mathur

More articles in Journal of Banking & Finance from Elsevier
Bibliographic data for series maintained by Dana Niculescu ().

Page updated 2019-12-10
Handle: RePEc:eee:jbfina:v:89:y:2018:i:c:p:78-93