Why Did Public Banks Lend More During the Global Financial Crisis?

June 5, 2020

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Format: Chicago

Joshua Bosshardt, and Eugenio M Cerutti. Why Did Public Banks Lend More During the Global Financial Crisis?, (USA: International Monetary Fund, 2020) accessed November 21, 2024

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

During the Global Financial Crisis (GFC), state-owned or public banks lent relatively more than domestic private banks in many countries. However, data limitations have hindered a thorough assessment of what led public banks to better maintain lending during the GFC. Using a novel bank-level dataset covering 25 emerging market economies, we show that public banks lent relatively more during the GFC because they pursued an objective of helping to stabilize the economy, rather than because they had superior fundamentals or access to public or depositors’ funding. Nonetheless, their countercyclical behavior seems unique to the GFC rather than a regular characteristic of public banks before and after the GFC.

Subject: Bank credit, Banking, Financial crises, Financial institutions, Global financial crisis of 2008-2009, Loans, Money, Nonperforming loans, State-owned banks

Keywords: Bank, Bank credit, Bank fundamentals, Credit crunch, Crisis, Development bank, Fastest-growing bank, Financial crisis, Global, Global financial crisis, Global financial crisis of 2008-2009, Lending, Loan portfolio, Loans, Loans growth, Nonperforming loans, Ownership status, State-owned banks, WP

Publication Details

Pages:

36
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2020/084
Stock No:

WPIEA2020084
ISBN:

9781513546049
ISSN:

1018-5941

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