The Long Shadow of the Global Financial Crisis: Public Interventions in the Financial Sector

Deniz Igan, Hala Moussawi, Alexander Tieman, Aleksandra Zdzienicka, Giovanni Dell'ariccia and Paolo Mauro

No 2019/164, IMF Working Papers from International Monetary Fund

Abstract: We track direct public interventions and public holdings in 1,114 financial institutions over the period 2007–17 in 37 countries based on publicly available information. We use aggregate official data to validate this new dataset and estimate the fiscal impact of interventions, including the value of asset holdings remaining in state hands at end-2017. Direct public support to financial institutions amounted to $1.6 trillion ($3.5 trillion including guarantees), with larger amounts allocated to lower capitalized and less profitable banks. As of end-2017, only a few countries had fully divested the initial support they provided during the crisis. Public holdings were divested faster in better capitalized, more profitable, and more liquid banks, and in countries where the economy recovered faster. In countries where the government stake remained high relative to the initial intervention, private investment and credit growth were slower, financial access, depth, efficiency, and competition were worse, and financial stability improved less.

Keywords: WP; bank characteristic; bank variable; country condition; return on assets; intervened bank; Financial crisis; Government interventions; Bank resolution; asset holding; asset quality; system assets; government intervention; asset purchase; cash flow; Stocks; Financial sector; Loans; Liquidity; State-owned banks; Global (search for similar items in EconPapers)
Pages: 90
Date: 2019-07-30
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

Downloads: (external link)
http://www.imf.org/external/pubs/cat/longres.aspx?sk=48518 (application/pdf)

Related works:
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: https://EconPapers.repec.org/RePEc:imf:imfwpa:2019/164

Ordering information: This working paper can be ordered from
http://www.imf.org/external/pubs/pubs/ord_info.htm

Access Statistics for this paper

More papers in IMF Working Papers from International Monetary Fund International Monetary Fund, Washington, DC USA. Contact information at EDIRC.
Bibliographic data for series maintained by Akshay Modi ().