State-Owned Banks and Fiscal Discipline |
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| Author:
| Gonzalez-Garcia, Jesus
Grigoli, Francesco |
| Series title: | IMF Working Papers |
| ISBN: | 978-1-4843-9280-5 |
| Publication Date: | Oct 2013 |
| Publisher: | International Monetary Fund
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| Book Format: | Paperback |
| List Price: | AUD $31.95 |
Book Description:
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State-owned banks may help to soften the financing constraints of public sector entities and consequently become a factor that hampers fiscal discipline. Using a panel dataset, we find that a larger presence of state-owned banks in the banking system is associated with more credit to the public sector, larger fiscal deficits, higher public debt ratios, and the crowding out of credit to the private sector. These results suggest that the lending practices of state-owned banks should be...
More DescriptionState-owned banks may help to soften the financing constraints of public sector entities and consequently become a factor that hampers fiscal discipline. Using a panel dataset, we find that a larger presence of state-owned banks in the banking system is associated with more credit to the public sector, larger fiscal deficits, higher public debt ratios, and the crowding out of credit to the private sector. These results suggest that the lending practices of state-owned banks should be carefully assessed in any strategy to pursue fiscal discipline.