State-Owned Banks and 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 sect...

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Bibliographic Details
Main Author: Gonzalez-Garcia, Jesus
Other Authors: Grigoli, Francesco
Format: Journal
Language:English
Published: Washington, D.C. : International Monetary Fund, 2013.
Series:IMF Working Papers; Working Paper ; No. 2013/206
Online Access:Full text available on IMF
Description
Summary: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.
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Physical Description:1 online resource (26 pages)
Format:Mode of access: Internet
ISSN:1018-5941
Access:Electronic access restricted to authorized BRAC University faculty, staff and students