Bertay, Ata CanDemirguc-Kunt, AsliHuizinga, Harry2014-09-022014-09-022012-06https://hdl.handle.net/10986/19936This paper finds that lending by state banks is less procyclical than lending by private banks, especially in countries with good governance. Lending by state banks in high-income countries is even countercyclical. On the liability side, state banks expand potentially unstable non-deposit liabilities relatively little during booms, especially in countries with good governance. Public banks also report loan non-performance more evenly over the business cycle. Overall the results of the analysis suggest that state banks can play a useful role in stabilizing credit over the business cycle as well as during periods of financial instability. However, the track record of state banks in credit allocation remains quite poor, questioning the wisdom of using state banks as a short-term countercyclical tool.en-USCC BY 3.0 IGOACCOUNTINGASSET QUALITYASSETS OF STATEBALANCE SHEETSBANK ASSETSBANK CREDITBANK INTERMEDIATIONBANK LENDINGBANK LOANSBANK REGULATIONBANK SUPERVISIONBANKING CRISESBANKING CRISISBANKING RELATIONSHIPSBANKING SECTORBANKING SECTOR OUTREACHBANKING SERVICESBANKING SYSTEMSBONDBUSINESS CYCLEBUSINESS CYCLESCAPITAL REQUIREMENTSCDSCHECKSCIVIL SERVICECOMMERCIAL BANKSCONSOLIDATIONCOOPERATIVE BANKCORPORATE GOVERNANCECREDIBILITYCREDIT ALLOCATIONCREDIT EXPANSIONCREDIT GROWTHCREDIT RISKDEPENDENTDEPOSITDEPOSIT LIABILITIESDEPOSITSDEVELOPING COUNTRIESDEVELOPMENT POLICYDOMESTIC BANKDOMESTIC BANKSDUMMY VARIABLEDUMMY VARIABLESECONOMETRICSECONOMIC DEVELOPMENTECONOMIC GROWTHECONOMIC OUTCOMESEMERGING ECONOMIESEMERGING MARKETEMERGING MARKETSEMERGING STOCK MARKETENDOGENOUS VARIABLESEQUITY LOANSESTATEEXCHANGE RATEFINANCIAL CRISISFINANCIAL DEVELOPMENTFINANCIAL INSTABILITYFINANCIAL INTERMEDIATIONFINANCIAL STATEMENTSFOREIGN BANKFOREIGN BANKSFOREIGN OWNERSHIPFOREIGN OWNERSHIPSFUNDING SOURCEGDPGDP DEFLATORGDP PER CAPITAGLOBAL BANKINGGOOD GOVERNANCEGOVERNMENT BANKGOVERNMENT BANKSGOVERNMENT BUREAUCRACYGOVERNMENT OWNERSHIPGREATER CREDIT RISKGROWTH RATEINCOMEINCOME GROUPINCOME GROWTHINEFFICIENCYINFLATIONINTEREST EXPENSEINTERMEDIATION SPREADSINTERNATIONAL BANKINTERNATIONAL BANKSINTERNATIONAL FINANCIAL STATISTICSLIABILITYLIABILITY SIDELIQUID ASSETSLIQUIDITYLOANLOAN LOSSLOAN LOSS PROVISIONINGLOAN LOSS PROVISIONSLOAN QUALITYLOAN RATIOLOCAL CURRENCYLONG-TERM LIABILITIESMACROECONOMIC CONTROLSMONETARY FUNDMONETARY POLICYMORTGAGENON-PERFORMING LOANSNONPERFORMANCENUMBER OF BANKSOWNERSHIP STRUCTUREOWNERSHIP STRUCTURESPOSITIVE COEFFICIENTPOSITIVE COEFFICIENTSPRIVATE BANKPRIVATE BANKSPRIVATIZATIONPROFITABILITYPRUDENTIAL SUPERVISIONPUBLIC BANKSPUBLIC SERVICESREAL ESTATEREAL GDPREAL INCOMERECESSIONSRISK PROFILESAVINGSSAVINGS BANKSAVINGS BANKSSHARE OF ASSETSSTATE BANKSTATE BANKINGSTATE BANKSSUBSIDIARIEST-BILLT-BILL RATE10.1596/1813-9450-6110