State-Owned Banks and Fiscal Discipline [electronic resource] / Jesus Gonzalez-Garcia.
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TextSeries: IMF Working Papers; Working Paper ; No. 13/206Publication details: Washington, D.C. : International Monetary Fund, 2013Description: 1 online resource (26 p.)ISBN: 1484392809 :ISSN: 1018-5941Subject(s): Bank | Banking System | Banking | Crowding Out | Fiscal Discipline | Governmental Loans and CreditsAdditional physical formats: Print Version:: State-Owned Banks and Fiscal DisciplineOnline resources: IMF e-Library | IMF Book Store Abstract: 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 carefully assessed in any strategy to pursue fiscal discipline.
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 carefully assessed in any strategy to pursue fiscal discipline.
Description based on print version record.
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