Bank Ownership and Credit Cycle: The Lower Sensitivity of Public Bank Lending to the Business Cycle

A Heterodox Economics Critique of Financial Liberalization

“…Reserve injections and withdrawals would be effected through open market operations with non DCI intermediaries. Recent scholarship supports our thesis (Duprey, 2013). Individual bank balance sheet data over 1990-2010 for 93 countries covering 459 public banks shows that public bank lending decreases significantly less during economic downturns.…”

Institutions, economic openness and credit cycles: An international evidence

“…The positive coefficient for logarithm of GDP per capita is at 1% significance, suggesting that the economic growth leads to an increase of the credit level. In other words, a high economic growth favors credit cycles in line with existing studies on the issues (Kiss et al (2006), Igan and Tan (2015), Mendoza and Terrones (2008), Chen et al (2012), Duprey (2012), Apostoaie and Percic, 2014) Note: The Granger non-causality test of Dumitrescu & Hurlin (2012) is used, H0: X does not Granger-cause Y, H1: X does Granger-cause Y for at least one panelvar (country). *, **, *** is significant levels at 10%, 5%, and 1%, respectively.…”

Heterogeneous Banking Efficiency: Allocative Distortions and Lending Fluctuations

“…At the bank level, it has been outlined by Duprey (2012) and Bertay et al (2012) in the specific case of public banks which are largely accepted to be detrimental to long term macroeconomic variables since the seminal paper by La Porta et al (2002). Likewise 3.…”

“…Heterogeneity in bank efficiency seemed to help countries weather the first part of the crisis, that is to say the presence of a less efficient banking system limited the reduction in output growth (Giannone et al, 2011). Moreover, some specific banking activities such as investment banking are known to be more volatile than standard commercial banking (Adrian and Shin, 2010); likewise, banks with specific ownership characteristics feature different lending patterns, with governmental owned banks (Duprey, 2012;Bertay et al, 2012) or banks active only on a local segment of the market (Micco and Panizza, 2006) having a lending policy less responsive to macroeconomic shocks. So banking heterogeneity seems to be a source of fluctuations, and lending fluctuations across banks is itself heterogeneous.…”