Do publicly owned banks lend against the wind?

Thibaut Duprey

PSE-Ecole d'économie de Paris (Postprint) from HAL

Abstract: This paper investigates the lending pattern of state-owned banks over the business cycle. I take the endogeneity of public banking into account by including records on both privatizations and nationalizations during banking crises. I find that public bank lending is (i) significantly less cyclical except for low-income countries, (ii) asymmetric along the business cycle, (iii) heterogeneous across stages of economic development, and (iv) related to banks' vulnerability on their funding side. Public banks reduce their lending less during economic downturns, but their ability to absorb negative shocks is marginally decreasing as the size of the shock increases.

Keywords: Market; Government Policy; Bank (search for similar items in EconPapers)
Date: 2015
Note: View the original document on HAL open archive server: https://hal.inrae.fr/hal-02630038v1
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Citations: View citations in EconPapers (10)

Published in International Journal of Central Banking, 2015, 11 (2), pp.65-112

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Journal Article: Do Publicly Owned Banks Lend Against the Wind? (2015)
Working Paper: Do publicly owned banks lend against the wind? (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:pseptp:hal-02630038

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