Čihák, MartinDemirgüç-Kunt, Asli2013-04-182013-04-182013-04https://hdl.handle.net/10986/13197The global financial crisis has given greater credence to the idea that active state involvement in the financial sector can be helpful for stability and development. There is now evidence that, for example, lending by state-owned banks has helped in mitigating the impact of the crisis on aggregate credit. But evidence also points to negative longer-term effects of direct interventions on resource allocation and quality of intermediation. This suggests a need to rebalance the state's roles from direct to less direct involvement, as the crisis subsides. The state does have very important roles, especially in providing well-defined regulations and enforcing them, ensuring healthy competition, and strengthening financial infrastructure. One of the crisis lessons is the importance of getting the basics right first: countries with complex but poorly enforced regulations suffered more during the global crisis. Evidence also suggests that instead of restricting competition, the state needs to encourage contestability through healthy entry of well-capitalized institutions and timely exit of insolvent ones. There is also new evidence that supports the state's key role in promoting transparency of information and reducing counterparty risk. The challenge of financial sector policies is to better align private incentives with public interest, without taxing or subsidizing private risk-taking.en-USCC BY 3.0 IGOACCESS TO FINANCEACCESS TO FINANCIAL SERVICESACCESS TO INFORMATIONACCOUNTABILITYAGENCY PROBLEMSARBITRAGEAUDITSBAILOUTSBALANCE SHEETSBANK ACCOUNTSBANK CAPITALBANK COMPETITIONBANK CREDITBANK HOLDINGBANK HOLDING COMPANIESBANK LENDINGBANK MARKETBANK REGULATIONBANK REGULATORY AGENCIESBANK RUNBANKING CRISESBANKING CRISISBANKING REGULATIONBANKING SECTORBANKING SYSTEMBANKING SYSTEMSBANKSBARRIERS TO ENTRYBENEFITS OF CREDITBUSINESS CYCLECAPITAL REQUIREMENTSCENTRAL BANKCENTRAL BANKSCHECKSCLEARING HOUSECOMMERCIAL BANKCOMMERCIAL BANKSCOMMERCIAL PAPERCOMPETITION POLICYCONSUMER CREDITCONSUMER LOANCONSUMER PROTECTIONCONSUMER PROTECTION LAWSCONTAGIONCONTAGIOUS BANK RUNSCONTRACT ENFORCEABILITYCORPORATE CONTROLCORPORATE DEBTCREDIT ALLOCATIONCREDIT BUREAUCREDIT CRUNCHCREDIT GUARANTEECREDIT GUARANTEESCREDIT INFORMATIONCREDIT MARKETCREDIT MARKETSCREDIT PRACTICESCREDIT PROVIDERSCREDIT REGISTRYCREDIT REPORTINGCREDIT REPORTING SYSTEMSCREDITORSCRISIS COUNTRIESDEBTDEPOSITDEPOSIT INSURANCEDEPOSIT INSURANCE COVERAGEDEPOSITORSDEPOSITSDERIVATIVESDERIVATIVES MARKETSDEVELOPING ECONOMIESDEVELOPMENT BANKDEVELOPMENT BANKSDIRECT GOVERNMENT INTERVENTIONSECONOMIC CRISISECONOMIC DEVELOPMENTECONOMIC GROWTHECONOMIC POLICYECONOMIC STABILITYECONOMICSEMERGING MARKETSEQUITY STAKESEXPORT FINANCINGEXTENSION OF CREDITEXTERNALITIESFINANCIAL ACCESSFINANCIAL CRISESFINANCIAL CRISISFINANCIAL DEPTHFINANCIAL DEVELOPMENTFINANCIAL INFORMATIONFINANCIAL INFRASTRUCTUREFINANCIAL INNOVATIONFINANCIAL INSTITUTIONFINANCIAL INSTITUTIONSFINANCIAL INSTRUMENTSFINANCIAL INTERMEDIARIESFINANCIAL INTERMEDIATIONFINANCIAL MARKETSFINANCIAL POLICIESFINANCIAL PRODUCTSFINANCIAL REFORMFINANCIAL REGULATIONFINANCIAL SECTORFINANCIAL SECTOR INFRASTRUCTUREFINANCIAL SECTOR POLICIESFINANCIAL SERVICESFINANCIAL STABILITYFINANCIAL STUDIESFINANCIAL SUSTAINABILITYFINANCIAL SYSTEMFINANCIAL SYSTEMSFINANCIAL TRANSACTIONSFLOW OF INFORMATIONGLOBAL BANKINGGLOBAL FINANCEGOVERNMENT ACTIONGOVERNMENT AIDGOVERNMENT BANKGOVERNMENT INTERVENTIONGOVERNMENT INTERVENTIONSGOVERNMENT OWNERSHIPGOVERNMENT POLICIESGOVERNMENT POLICYGUARANTEE SCHEMESINFORMATION ASYMMETRIESINFORMATION DISCLOSUREINFORMATION SHARINGINTERBANK MARKETSINTERBANK MONEY MARKETSINTEREST RATESINTERNATIONAL BANKINTERNATIONAL DEVELOPMENTINVESTMENT BANKINGLAWSLEGAL FRAMEWORKLEGISLATIONLENDERLENDERSLENDING BEHAVIORLENDING PATTERNSLENDING PORTFOLIOLEVEL PLAYING FIELDLIQUIDITYLIQUIDITY PROBLEMSLOANLOAN MARKETSLOAN PORTFOLIOSLOAN PROGRAMSLOCAL BANKSMANDATESMARKET DEVELOPMENTSMARKET DISCIPLINEMARKET EFFICIENCYMARKET FAILURESMARKET STRUCTUREMATURITYMATURITY MISMATCHMICROFINANCEMONETARY FUNDMORAL HAZARDMORTGAGEMORTGAGE LENDINGNATIONAL CREDITNONBANK FINANCIAL INSTITUTIONSPAYMENT SYSTEMPAYMENT SYSTEMSPOLITICAL SYSTEMPRIVATE BANKSPRIVATE FINANCIAL INTERMEDIARIESPRIVATE LENDERSPUBLIC BANKPUBLIC POLICYREAL ESTATEREGULATORREGULATORY AGENCYREGULATORY FRAMEWORKREGULATORY PRACTICESREPAYMENTRESOURCE ALLOCATIONRETURNSRISK CONTROLSRISK MANAGEMENTRISK MANAGEMENT TOOLSRISK TAKINGSECURITIESSECURITIES MARKETSSECURITIES TRANSACTIONSSECURITIZATIONSETTLEMENTSETTLEMENT INFRASTRUCTURESETTLEMENT SYSTEMSSHAREHOLDERSSHORT-TERM LIQUIDITYSOCIAL WELFARESOLVENCYSTABILITY OF PAYMENT SYSTEMSSTATE BANKSTATE BANKSSTATE GUARANTEESSTATE OWNED BANKSSTATISTICAL ANALYSISSUPERVISORY FRAMEWORKSYSTEMIC RISKTERM CREDITTRADINGTRANSACTIONTRANSPARENCYTRANSPARENCY OF INFORMATIONUNEMPLOYMENTUNIONWorld Bank10.1596/1813-9450-6400