Bank Ownership and Lending Behavior

19 Pages Posted: 25 Apr 2011

See all articles by Alejandro Micco

Alejandro Micco

University of Chile

Ugo Panizza

United Nations - Conference on Trade and Development (UNCTAD); Graduate Institute of International and Development Studies (IHEID)

Multiple version iconThere are 2 versions of this paper

Date Written: November 2004

Abstract

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.

Suggested Citation

Micco, Alejandro and Panizza, Ugo G., Bank Ownership and Lending Behavior (November 2004). IDB Working Paper No. 431. Available at SSRN: https://ssrn.com/abstract=1818720 or http://dx.doi.org/10.2139/ssrn.1818720

Alejandro Micco (Contact Author)

University of Chile ( email )

Pío Nono Nº1, Providencia
Santiago, R. Metropolitana 7520421
Chile

Ugo G. Panizza

United Nations - Conference on Trade and Development (UNCTAD) ( email )

Palais des Nations
Office E 8074
Geneva, 1211
Switzerland

Graduate Institute of International and Development Studies (IHEID) ( email )

PO Box 136
Geneva, CH-1211
Switzerland

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