Bank Ownership and Lending Behavior

Abstract

This paper checks whether state-ownership of banks is correlated with ending behavior over the business cycle and finds that their lending is less responsive to macroeconomic shocks than the lending of private banks. The paper tests whether this is due to the presence of "lazy" public bank managers, and finds no evidence in support of this hypothesis.

Keywords: State-owned banks, credit cycle

JEL Classification: G21, H11, E44