Risk-bearing by the state: When is it good public policy?

Anginer, Deniz; Torre, Augusto de la; Ize, Alain

doi:10.1016/j.jfs.2013.03.006

Cited by 24 publications

(7 citation statements)

References 40 publications

(41 reference statements)

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“…1 Anginer, de la Torre, and Ize, (2014) use banks in 74 countries to observe risk bearing by the state. During financial crises governments came to the rescue of troubled financial markets and institutions.…”

Section: Introductionmentioning

confidence: 99%

Government intervention, bank ownership and risk-taking during the Indonesian financial crisis

Agusman

Cullen

Gasbarro

et al. 2014

Pacific-Basin Finance Journal

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The 1997/98 financial crisis forced the Indonesian government to inject capital into selected banks, introduce deposit insurance and change capital requirements. This study investigates the relation between highly concentrated ownership and bank risk-taking using a sample of 52 insured private commercial Indonesian banks during the 1995-2003 period. For restructured banks, ownership concentration is positively related to overall risk, and negatively related to credit and liquidity risk, especially during the relaxed capital adequacy requirement period. Liquidity risk is reduced when the government and owners contribute additional capital, and credit risk is lowered as the government removes bad loans from problematic banks.JEL classification: G21, G28, G30, G32.

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Section: Introductionmentioning

confidence: 99%

Government intervention, bank ownership and risk-taking during the Indonesian financial crisis

Agusman

Cullen

Gasbarro

et al. 2014

Pacific-Basin Finance Journal

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“…In a context of high uncertainty, with lenders generally retrenching, governments have stepped in and absorbed the increased credit risk, ensuring that firms have access to resources during the hibernation phase. In particular, the state is generally in a good position to offer credit guarantees when there is high risk aversion (Anginer et al, 2014). Among other things, governments have capitalized state-owned banks; scaled up public credit guarantee programs (typically covering 70 percent to 90 percent of the loans); and supported large-scale purchases of portfolios of loans.…”

Section: Transferring Credit Risk To the Governmentmentioning

confidence: 99%

Financing Firms in Hibernation during the COVID-19 Pandemic

Didier¹,

Huneeus

Larraín

et al. 2020

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The coronavirus (COVID-19) pandemic has halted economic activity worldwide, hurting firms and pushing them toward bankruptcy. This paper provides a unified framework to organize the policy debate related to firm financing during the downturn, centered along four main points. First, the economic crisis triggered by the spread of the virus is radically different from past crises, with important consequences for optimal policy responses. Second, to avoid inefficient bankruptcies and long-term detrimental effects, it is important to preserve firms' relationships with key stakeholders, like workers, suppliers, customers, and creditors. Third, firms can benefit from "hibernating," using the minimum bare cash necessary to withstand the pandemic, while using credit to remain alive until the crisis subdues. Fourth, the existing legal and regulatory infrastructure is ill-equipped to deal with an exogenous systemic shock such as this pandemic. Financial sector policies can help increase the provision of credit, while posing difficult choices and trade-offs.

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“…SoEs can internalize this source of risk even better than the State itself, since they implicitly “crowd‐in” private investors, and thence reduce the agency problems that could otherwise hamper governments (Anginer, de la Torre, & Ize, 2014; Engel et al., 2014).…”

Section: Theoretical and Conceptual Backgroundmentioning

confidence: 99%

Evaluating the performance of local SoEs as output‐maximizing entities: The case of Friuli Venezia Giulia

Massarutto

Garlatti

Miani

et al. 2020

Ann Public Coop Econ

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Publicly owned private‐law organizations represent a sort of a hybrid between pure‐public and pure‐private management forms, and a rather successful one, at least if one considers the ongoing success that such organizations encounter in many European countries, especially at the local level. Economic theory has devoted scant attention to the reasons that may confer a competitive advantage to public enterprises, vis‐à‐vis both entirely privatized companies and traditional public bureaucracies. The paper develops a conceptual framework to systematically evaluate the performances of local SoEs in relation to their ability to achieve policy goals. By considering SoEs as output‐maximizing organizations rather than profit‐maximizing ones, the proposed approach entails an interactive dialogue between evaluators, policymakers and managers to deliver better evaluation outcomes. The methodology is applied to assess the performance of a sample of local SoEs owned by the Region Friuli Venezia Giulia in Italy in an effort to support policymakers in deciding whether to maintain its shareholding participations or divest them, that is, privatizing the public services involved.

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Risk-bearing by the state: When is it good public policy?

Cited by 24 publications

References 40 publications

Government intervention, bank ownership and risk-taking during the Indonesian financial crisis

Government intervention, bank ownership and risk-taking during the Indonesian financial crisis

Financing Firms in Hibernation during the COVID-19 Pandemic

Evaluating the performance of local SoEs as output‐maximizing entities: The case of Friuli Venezia Giulia

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