1. The Long Shadow of Public Interventions in the Financial Sector
- Author
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Dell'Ariccia, Giovanni, Igan, Deniz, Mauro, Paolo, Moussawi, Hala, F.Tieman, Alexander, and Zdzienicka, Aleksandra
- Subjects
Financial services industry -- Laws, regulations and rules ,Government regulation ,Company business management ,Financial services industry ,Banking, finance and accounting industries ,Business ,Business, international - Abstract
We take stock of the costs of government interventions in the financial sector over the period 2007-2017 and track the assets still under government control. We build a new bank-level dataset on interventions and holding divestitures covering 1114 financial institutions in 37 countries. At end-2017, few countries had fully divested their financial sector holdings. On average, public holdings were divested faster in more capitalized, profitable, and liquid banks. They remained higher in countries where private investment and credit growth grew slower, financial access, depth, efficiency, and competition were worse, and financial stability improved less. Keywords Financial crisis * Government interventions * Bank resolution, JEL Classification E50 * E60 * G20 1 Introduction Substantial government interventions in financial institutions were a hallmark of the response to the Global Financial Crisis (GFC). In many countries, [...]
- Published
- 2022
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