Rethinking the State's Role in Finance
The 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...
| Main Authors: | , |
|---|---|
| Format: | Policy Research Working Paper |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2013
|
| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2013/01/17532460/rethinking-states-role-finance http://hdl.handle.net/10986/13197 |
| id |
okr-10986-13197 |
|---|---|
| recordtype |
oai_dc |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English en_US |
| topic |
ACCESS TO FINANCE ACCESS TO FINANCIAL SERVICES ACCESS TO INFORMATION ACCOUNTABILITY AGENCY PROBLEMS ARBITRAGE AUDITS BAILOUTS BALANCE SHEETS BANK ACCOUNTS BANK CAPITAL BANK COMPETITION BANK CREDIT BANK HOLDING BANK HOLDING COMPANIES BANK LENDING BANK MARKET BANK REGULATION BANK REGULATORY AGENCIES BANK RUN BANKING CRISES BANKING CRISIS BANKING REGULATION BANKING SECTOR BANKING SYSTEM BANKING SYSTEMS BANKS BARRIERS TO ENTRY BENEFITS OF CREDIT BUSINESS CYCLE CAPITAL REQUIREMENTS CENTRAL BANK CENTRAL BANKS CHECKS CLEARING HOUSE COMMERCIAL BANK COMMERCIAL BANKS COMMERCIAL PAPER COMPETITION POLICY CONSUMER CREDIT CONSUMER LOAN CONSUMER PROTECTION CONSUMER PROTECTION LAWS CONTAGION CONTAGIOUS BANK RUNS CONTRACT ENFORCEABILITY CORPORATE CONTROL CORPORATE DEBT CREDIT ALLOCATION CREDIT BUREAU CREDIT CRUNCH CREDIT GUARANTEE CREDIT GUARANTEES CREDIT INFORMATION CREDIT MARKET CREDIT MARKETS CREDIT PRACTICES CREDIT PROVIDERS CREDIT REGISTRY CREDIT REPORTING CREDIT REPORTING SYSTEMS CREDITORS CRISIS COUNTRIES DEBT DEPOSIT DEPOSIT INSURANCE DEPOSIT INSURANCE COVERAGE DEPOSITORS DEPOSITS DERIVATIVES DERIVATIVES MARKETS DEVELOPING ECONOMIES DEVELOPMENT BANK DEVELOPMENT BANKS DIRECT GOVERNMENT INTERVENTIONS ECONOMIC CRISIS ECONOMIC DEVELOPMENT ECONOMIC GROWTH ECONOMIC POLICY ECONOMIC STABILITY ECONOMICS EMERGING MARKETS EQUITY STAKES EXPORT FINANCING EXTENSION OF CREDIT EXTERNALITIES FINANCIAL ACCESS FINANCIAL CRISES FINANCIAL CRISIS FINANCIAL DEPTH FINANCIAL DEVELOPMENT FINANCIAL INFORMATION FINANCIAL INFRASTRUCTURE FINANCIAL INNOVATION FINANCIAL INSTITUTION FINANCIAL INSTITUTIONS FINANCIAL INSTRUMENTS FINANCIAL INTERMEDIARIES FINANCIAL INTERMEDIATION FINANCIAL MARKETS FINANCIAL POLICIES FINANCIAL PRODUCTS FINANCIAL REFORM FINANCIAL REGULATION FINANCIAL SECTOR FINANCIAL SECTOR INFRASTRUCTURE FINANCIAL SECTOR POLICIES FINANCIAL SERVICES FINANCIAL STABILITY FINANCIAL STUDIES FINANCIAL SUSTAINABILITY FINANCIAL SYSTEM FINANCIAL SYSTEMS FINANCIAL TRANSACTIONS FLOW OF INFORMATION GLOBAL BANKING GLOBAL FINANCE GOVERNMENT ACTION GOVERNMENT AID GOVERNMENT BANK GOVERNMENT INTERVENTION GOVERNMENT INTERVENTIONS GOVERNMENT OWNERSHIP GOVERNMENT POLICIES GOVERNMENT POLICY GUARANTEE SCHEMES INFORMATION ASYMMETRIES INFORMATION DISCLOSURE INFORMATION SHARING INTERBANK MARKETS INTERBANK MONEY MARKETS INTEREST RATES INTERNATIONAL BANK INTERNATIONAL DEVELOPMENT INVESTMENT BANKING LAWS LEGAL FRAMEWORK LEGISLATION LENDER LENDERS LENDING BEHAVIOR LENDING PATTERNS LENDING PORTFOLIO LEVEL PLAYING FIELD LIQUIDITY LIQUIDITY PROBLEMS LOAN LOAN MARKETS LOAN PORTFOLIOS LOAN PROGRAMS LOCAL BANKS MANDATES MARKET DEVELOPMENTS MARKET DISCIPLINE MARKET EFFICIENCY MARKET FAILURES MARKET STRUCTURE MATURITY MATURITY MISMATCH MICROFINANCE MONETARY FUND MORAL HAZARD MORTGAGE MORTGAGE LENDING NATIONAL CREDIT NONBANK FINANCIAL INSTITUTIONS PAYMENT SYSTEM PAYMENT SYSTEMS POLITICAL SYSTEM PRIVATE BANKS PRIVATE FINANCIAL INTERMEDIARIES PRIVATE LENDERS PUBLIC BANK PUBLIC POLICY REAL ESTATE REGULATOR REGULATORY AGENCY REGULATORY FRAMEWORK REGULATORY PRACTICES REPAYMENT RESOURCE ALLOCATION RETURNS RISK CONTROLS RISK MANAGEMENT RISK MANAGEMENT TOOLS RISK TAKING SECURITIES SECURITIES MARKETS SECURITIES TRANSACTIONS SECURITIZATION SETTLEMENT SETTLEMENT INFRASTRUCTURE SETTLEMENT SYSTEMS SHAREHOLDERS SHORT-TERM LIQUIDITY SOCIAL WELFARE SOLVENCY STABILITY OF PAYMENT SYSTEMS STATE BANK STATE BANKS STATE GUARANTEES STATE OWNED BANKS STATISTICAL ANALYSIS SUPERVISORY FRAMEWORK SYSTEMIC RISK TERM CREDIT TRADING TRANSACTION TRANSPARENCY TRANSPARENCY OF INFORMATION UNEMPLOYMENT UNION |
| spellingShingle |
ACCESS TO FINANCE ACCESS TO FINANCIAL SERVICES ACCESS TO INFORMATION ACCOUNTABILITY AGENCY PROBLEMS ARBITRAGE AUDITS BAILOUTS BALANCE SHEETS BANK ACCOUNTS BANK CAPITAL BANK COMPETITION BANK CREDIT BANK HOLDING BANK HOLDING COMPANIES BANK LENDING BANK MARKET BANK REGULATION BANK REGULATORY AGENCIES BANK RUN BANKING CRISES BANKING CRISIS BANKING REGULATION BANKING SECTOR BANKING SYSTEM BANKING SYSTEMS BANKS BARRIERS TO ENTRY BENEFITS OF CREDIT BUSINESS CYCLE CAPITAL REQUIREMENTS CENTRAL BANK CENTRAL BANKS CHECKS CLEARING HOUSE COMMERCIAL BANK COMMERCIAL BANKS COMMERCIAL PAPER COMPETITION POLICY CONSUMER CREDIT CONSUMER LOAN CONSUMER PROTECTION CONSUMER PROTECTION LAWS CONTAGION CONTAGIOUS BANK RUNS CONTRACT ENFORCEABILITY CORPORATE CONTROL CORPORATE DEBT CREDIT ALLOCATION CREDIT BUREAU CREDIT CRUNCH CREDIT GUARANTEE CREDIT GUARANTEES CREDIT INFORMATION CREDIT MARKET CREDIT MARKETS CREDIT PRACTICES CREDIT PROVIDERS CREDIT REGISTRY CREDIT REPORTING CREDIT REPORTING SYSTEMS CREDITORS CRISIS COUNTRIES DEBT DEPOSIT DEPOSIT INSURANCE DEPOSIT INSURANCE COVERAGE DEPOSITORS DEPOSITS DERIVATIVES DERIVATIVES MARKETS DEVELOPING ECONOMIES DEVELOPMENT BANK DEVELOPMENT BANKS DIRECT GOVERNMENT INTERVENTIONS ECONOMIC CRISIS ECONOMIC DEVELOPMENT ECONOMIC GROWTH ECONOMIC POLICY ECONOMIC STABILITY ECONOMICS EMERGING MARKETS EQUITY STAKES EXPORT FINANCING EXTENSION OF CREDIT EXTERNALITIES FINANCIAL ACCESS FINANCIAL CRISES FINANCIAL CRISIS FINANCIAL DEPTH FINANCIAL DEVELOPMENT FINANCIAL INFORMATION FINANCIAL INFRASTRUCTURE FINANCIAL INNOVATION FINANCIAL INSTITUTION FINANCIAL INSTITUTIONS FINANCIAL INSTRUMENTS FINANCIAL INTERMEDIARIES FINANCIAL INTERMEDIATION FINANCIAL MARKETS FINANCIAL POLICIES FINANCIAL PRODUCTS FINANCIAL REFORM FINANCIAL REGULATION FINANCIAL SECTOR FINANCIAL SECTOR INFRASTRUCTURE FINANCIAL SECTOR POLICIES FINANCIAL SERVICES FINANCIAL STABILITY FINANCIAL STUDIES FINANCIAL SUSTAINABILITY FINANCIAL SYSTEM FINANCIAL SYSTEMS FINANCIAL TRANSACTIONS FLOW OF INFORMATION GLOBAL BANKING GLOBAL FINANCE GOVERNMENT ACTION GOVERNMENT AID GOVERNMENT BANK GOVERNMENT INTERVENTION GOVERNMENT INTERVENTIONS GOVERNMENT OWNERSHIP GOVERNMENT POLICIES GOVERNMENT POLICY GUARANTEE SCHEMES INFORMATION ASYMMETRIES INFORMATION DISCLOSURE INFORMATION SHARING INTERBANK MARKETS INTERBANK MONEY MARKETS INTEREST RATES INTERNATIONAL BANK INTERNATIONAL DEVELOPMENT INVESTMENT BANKING LAWS LEGAL FRAMEWORK LEGISLATION LENDER LENDERS LENDING BEHAVIOR LENDING PATTERNS LENDING PORTFOLIO LEVEL PLAYING FIELD LIQUIDITY LIQUIDITY PROBLEMS LOAN LOAN MARKETS LOAN PORTFOLIOS LOAN PROGRAMS LOCAL BANKS MANDATES MARKET DEVELOPMENTS MARKET DISCIPLINE MARKET EFFICIENCY MARKET FAILURES MARKET STRUCTURE MATURITY MATURITY MISMATCH MICROFINANCE MONETARY FUND MORAL HAZARD MORTGAGE MORTGAGE LENDING NATIONAL CREDIT NONBANK FINANCIAL INSTITUTIONS PAYMENT SYSTEM PAYMENT SYSTEMS POLITICAL SYSTEM PRIVATE BANKS PRIVATE FINANCIAL INTERMEDIARIES PRIVATE LENDERS PUBLIC BANK PUBLIC POLICY REAL ESTATE REGULATOR REGULATORY AGENCY REGULATORY FRAMEWORK REGULATORY PRACTICES REPAYMENT RESOURCE ALLOCATION RETURNS RISK CONTROLS RISK MANAGEMENT RISK MANAGEMENT TOOLS RISK TAKING SECURITIES SECURITIES MARKETS SECURITIES TRANSACTIONS SECURITIZATION SETTLEMENT SETTLEMENT INFRASTRUCTURE SETTLEMENT SYSTEMS SHAREHOLDERS SHORT-TERM LIQUIDITY SOCIAL WELFARE SOLVENCY STABILITY OF PAYMENT SYSTEMS STATE BANK STATE BANKS STATE GUARANTEES STATE OWNED BANKS STATISTICAL ANALYSIS SUPERVISORY FRAMEWORK SYSTEMIC RISK TERM CREDIT TRADING TRANSACTION TRANSPARENCY TRANSPARENCY OF INFORMATION UNEMPLOYMENT UNION Čihák, Martin Demirgüç-Kunt, Asli Rethinking the State's Role in Finance |
| relation |
Policy Research Working Paper;No. 6400 |
| description |
The 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. |
| format |
Publications & Research :: Policy Research Working Paper |
| author |
Čihák, Martin Demirgüç-Kunt, Asli |
| author_facet |
Čihák, Martin Demirgüç-Kunt, Asli |
| author_sort |
Čihák, Martin |
| title |
Rethinking the State's Role in Finance |
| title_short |
Rethinking the State's Role in Finance |
| title_full |
Rethinking the State's Role in Finance |
| title_fullStr |
Rethinking the State's Role in Finance |
| title_full_unstemmed |
Rethinking the State's Role in Finance |
| title_sort |
rethinking the state's role in finance |
| publisher |
World Bank, Washington, DC |
| publishDate |
2013 |
| url |
http://documents.worldbank.org/curated/en/2013/01/17532460/rethinking-states-role-finance http://hdl.handle.net/10986/13197 |
| _version_ |
1764422943402622976 |
| spelling |
okr-10986-131972021-04-23T14:03:07Z Rethinking the State's Role in Finance Čihák, Martin Demirgüç-Kunt, Asli ACCESS TO FINANCE ACCESS TO FINANCIAL SERVICES ACCESS TO INFORMATION ACCOUNTABILITY AGENCY PROBLEMS ARBITRAGE AUDITS BAILOUTS BALANCE SHEETS BANK ACCOUNTS BANK CAPITAL BANK COMPETITION BANK CREDIT BANK HOLDING BANK HOLDING COMPANIES BANK LENDING BANK MARKET BANK REGULATION BANK REGULATORY AGENCIES BANK RUN BANKING CRISES BANKING CRISIS BANKING REGULATION BANKING SECTOR BANKING SYSTEM BANKING SYSTEMS BANKS BARRIERS TO ENTRY BENEFITS OF CREDIT BUSINESS CYCLE CAPITAL REQUIREMENTS CENTRAL BANK CENTRAL BANKS CHECKS CLEARING HOUSE COMMERCIAL BANK COMMERCIAL BANKS COMMERCIAL PAPER COMPETITION POLICY CONSUMER CREDIT CONSUMER LOAN CONSUMER PROTECTION CONSUMER PROTECTION LAWS CONTAGION CONTAGIOUS BANK RUNS CONTRACT ENFORCEABILITY CORPORATE CONTROL CORPORATE DEBT CREDIT ALLOCATION CREDIT BUREAU CREDIT CRUNCH CREDIT GUARANTEE CREDIT GUARANTEES CREDIT INFORMATION CREDIT MARKET CREDIT MARKETS CREDIT PRACTICES CREDIT PROVIDERS CREDIT REGISTRY CREDIT REPORTING CREDIT REPORTING SYSTEMS CREDITORS CRISIS COUNTRIES DEBT DEPOSIT DEPOSIT INSURANCE DEPOSIT INSURANCE COVERAGE DEPOSITORS DEPOSITS DERIVATIVES DERIVATIVES MARKETS DEVELOPING ECONOMIES DEVELOPMENT BANK DEVELOPMENT BANKS DIRECT GOVERNMENT INTERVENTIONS ECONOMIC CRISIS ECONOMIC DEVELOPMENT ECONOMIC GROWTH ECONOMIC POLICY ECONOMIC STABILITY ECONOMICS EMERGING MARKETS EQUITY STAKES EXPORT FINANCING EXTENSION OF CREDIT EXTERNALITIES FINANCIAL ACCESS FINANCIAL CRISES FINANCIAL CRISIS FINANCIAL DEPTH FINANCIAL DEVELOPMENT FINANCIAL INFORMATION FINANCIAL INFRASTRUCTURE FINANCIAL INNOVATION FINANCIAL INSTITUTION FINANCIAL INSTITUTIONS FINANCIAL INSTRUMENTS FINANCIAL INTERMEDIARIES FINANCIAL INTERMEDIATION FINANCIAL MARKETS FINANCIAL POLICIES FINANCIAL PRODUCTS FINANCIAL REFORM FINANCIAL REGULATION FINANCIAL SECTOR FINANCIAL SECTOR INFRASTRUCTURE FINANCIAL SECTOR POLICIES FINANCIAL SERVICES FINANCIAL STABILITY FINANCIAL STUDIES FINANCIAL SUSTAINABILITY FINANCIAL SYSTEM FINANCIAL SYSTEMS FINANCIAL TRANSACTIONS FLOW OF INFORMATION GLOBAL BANKING GLOBAL FINANCE GOVERNMENT ACTION GOVERNMENT AID GOVERNMENT BANK GOVERNMENT INTERVENTION GOVERNMENT INTERVENTIONS GOVERNMENT OWNERSHIP GOVERNMENT POLICIES GOVERNMENT POLICY GUARANTEE SCHEMES INFORMATION ASYMMETRIES INFORMATION DISCLOSURE INFORMATION SHARING INTERBANK MARKETS INTERBANK MONEY MARKETS INTEREST RATES INTERNATIONAL BANK INTERNATIONAL DEVELOPMENT INVESTMENT BANKING LAWS LEGAL FRAMEWORK LEGISLATION LENDER LENDERS LENDING BEHAVIOR LENDING PATTERNS LENDING PORTFOLIO LEVEL PLAYING FIELD LIQUIDITY LIQUIDITY PROBLEMS LOAN LOAN MARKETS LOAN PORTFOLIOS LOAN PROGRAMS LOCAL BANKS MANDATES MARKET DEVELOPMENTS MARKET DISCIPLINE MARKET EFFICIENCY MARKET FAILURES MARKET STRUCTURE MATURITY MATURITY MISMATCH MICROFINANCE MONETARY FUND MORAL HAZARD MORTGAGE MORTGAGE LENDING NATIONAL CREDIT NONBANK FINANCIAL INSTITUTIONS PAYMENT SYSTEM PAYMENT SYSTEMS POLITICAL SYSTEM PRIVATE BANKS PRIVATE FINANCIAL INTERMEDIARIES PRIVATE LENDERS PUBLIC BANK PUBLIC POLICY REAL ESTATE REGULATOR REGULATORY AGENCY REGULATORY FRAMEWORK REGULATORY PRACTICES REPAYMENT RESOURCE ALLOCATION RETURNS RISK CONTROLS RISK MANAGEMENT RISK MANAGEMENT TOOLS RISK TAKING SECURITIES SECURITIES MARKETS SECURITIES TRANSACTIONS SECURITIZATION SETTLEMENT SETTLEMENT INFRASTRUCTURE SETTLEMENT SYSTEMS SHAREHOLDERS SHORT-TERM LIQUIDITY SOCIAL WELFARE SOLVENCY STABILITY OF PAYMENT SYSTEMS STATE BANK STATE BANKS STATE GUARANTEES STATE OWNED BANKS STATISTICAL ANALYSIS SUPERVISORY FRAMEWORK SYSTEMIC RISK TERM CREDIT TRADING TRANSACTION TRANSPARENCY TRANSPARENCY OF INFORMATION UNEMPLOYMENT UNION The 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. 2013-04-18T16:31:40Z 2013-04-18T16:31:40Z 2013-04 http://documents.worldbank.org/curated/en/2013/01/17532460/rethinking-states-role-finance http://hdl.handle.net/10986/13197 English en_US Policy Research Working Paper;No. 6400 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank World Bank, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research |