Bank Ownership and Lending Behavior

By A. Micco, U. Panizza. 2004

301 citations recorded by the source corpus.

This paper examines whether bank ownership (public versus private, domestic versus foreign) is correlated with bank lending behavior over the business cycle. The paper finds that state-owned banks may play a useful credit-smoothing role because their lending is less responsive to macroeconomic shocks than the lending of private banks. The paper investigates whether this differential behavior is due to an explicit objective of stabilizing credit or to the presence of "lazy" public bank managers; evidence is found in support of the former hypothesis. In the case of foreign-owned banks, the paper finds that the results are less clear-cut and argues that this finding is in line with existing theoretical models.

Subfields: Accounting, Finance

View Paper: https://www.semanticscholar.org/paper/433a7fa8ff94b9b6615680116b721448fcb7afbc

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Citations in the corpus

Bank Ownership and Credit Over the Business Cycle: Is Lending by State Banks Less Procyclical? (2012, methodology): “Micco and Panizza (2006) relate bank credit growth to GDP growth and an interaction term of GDP growth and state ownership variable for an international sample of banks over the 1995-2002 period finding that credit growth of state banks is less procyclical than for private banks.”
Foreign Banks and the Vienna Initiative: Turning Sinners into Saints? (2012, unknown): “Micco and Panizza (2006) show that lending by state banks is less procyclical than lending by private banks as governments use state banks to smooth credit over the business cycle. Main (2006) also finds that lending by state banks is less volatile in the face of macroeconomic shocks.”
Beyond market failures: the market creating and shaping roles of state investment banks (2016, unknown): “…(such as banks and firms) being too pro-cyclical (lending and investing too much in the boom and too little in the bust), putting the economy on a downwards path and not realising that by increasing lending they would be helping the economy out of recession (Levy-Yeyati, Micco, and Panizza 2004).”
The Real Effects of Government‐Owned Banks: Evidence from an Emerging Market (2014, background): “For example, political competition could capture regions in the bottom of the local business cycle and government loans could be used to stabilize business cycles (Micco and Panizza (2006)).”
The Impact of Non-performing Loans on Bank Lending Behavior: Evidence from the Italian Banking Sector (2015, background): “This has led to an academic focus on bank lending behavior (Micco & Panizza, 2006; Olokoyo, 2011; Djiogap & Ngomsi, 2012; Swamy & Sreejesh, 2012; Ladime et al., 2013).”
The Determinants of Banks' Liquidity Buffers in Central America (2012, unknown): “Micco, Alejandro, Ugo Panizza and Mónica Yañez, 2004, “Bank Ownership and Performance,” IDB Working Paper No. 518 (Washington: Inter-American Development Bank).”