The Economic Effects of a Borrower Bailout : Evidence from an Emerging Market
This paper studies the credit market implications and real effects of one the largest borrower bailout programs in history, enacted by the government of India against the backdrop of the 2008-2009 financial crisis. The study finds that the stimulus...
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| Format: | Policy Research Working Paper |
| Language: | English en_US |
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World Bank Group, Washington, DC
2014
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| Online Access: | http://documents.worldbank.org/curated/en/2014/11/20378033/economic-effects-borrower-bailout-evidence-emerging-market http://hdl.handle.net/10986/20656 |
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okr-10986-20656 |
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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 CREDIT ACCESS TO EXTERNAL FINANCE ACCOUNTING ADMINISTRATIVE BODY AFFORDABILITY AGRICULTURAL CREDIT AGRICULTURAL DEBT AGRICULTURAL LOANS AGRICULTURAL SECTOR AGRICULTURE ALLOCATION OF CREDIT AMOUNT OF CREDIT AMOUNT OF DEBT ASSETS AUDITS BAD DEBTS BAILOUT BAILOUTS BALANCE SHEET BALANCE SHEETS BANK BAILOUTS BANK BRANCH BANK BRANCHES BANK CREDIT BANK LENDING BANK LIQUIDITY BANK POLICY BANKING REGULATIONS BASE YEAR BENCHMARK BENEFICIARIES BENEFICIARY BORROWER BORROWER BEHAVIOR BORROWING BRANCH BANKING BUDGET DEFICITS BUSINESS CYCLES CD CENTRAL BANK CHECKS COLLATERAL COMMERCIAL BANKS COMMODITY PRICES CONDITIONAL DEBT CONSUMER CREDIT CONSUMER CREDIT CARD CONSUMERS CONSUMPTION EXPENDITURE CORRUPTION COST OF DEBT COSTS OF CREDIT CREDIT ALLOCATION CREDIT CONTRACTS CREDIT CULTURE CREDIT DISCIPLINE CREDIT LOSSES CREDIT MARKET CREDIT MARKETS CREDIT OUTSTANDING CREDIT RATIONING CREDIT SPREADS CREDITS DEBT DEBT CONTRACTS DEBT LEVELS DEBT OVERHANG DEBT RELIEF DEBT RESTRUCTURING DEBTS DEFAULT RATES DEFAULTERS DEFAULTS DEPENDENT DEVELOPMENT POLICY DISTRIBUTION OF CREDIT DUMMY VARIABLE DUMMY VARIABLES DURABLE ECONOMIC ACTIVITY ECONOMIC CRISIS ECONOMIC HISTORY ECONOMIC OUTCOMES ECONOMIC PERFORMANCE ECONOMIC POLICY ECONOMIC SHOCKS ECONOMIC TRENDS EFFECT OF DEBT ELASTICITY ELIGIBILITY CRITERIA ELIGIBLE BORROWERS EMERGING MARKET EMERGING MARKETS EMPLOYMENT EVERGREENING EXCLUSION EXISTING CREDIT EXTERNAL FINANCE EXTERNAL FINANCING FARM LOANS FARMERS FINANCIAL ASSISTANCE FINANCIAL CONSTRAINTS FINANCIAL CRISIS FINANCIAL DEVELOPMENT FINANCIAL INTERMEDIARIES FINANCIAL INTERMEDIATION FINANCIAL SECTOR FINANCIAL SHOCKS FORECLOSURE FORECLOSURES FUTURE CREDIT GDP GOVERNMENT INTERVENTION GOVERNMENT SPENDING HOME EQUITY HOUSEHOLD DEBT HOUSEHOLD DEBTS HOUSEHOLDS HOUSING IMPACT OF DEBT INDEBTED INDEBTEDNESS INSTITUTIONAL CREDIT INSTITUTIONAL ENVIRONMENT INSTITUTIONAL ENVIRONMENTS INSTRUMENT INTERNATIONAL BANK KEY CHALLENGE LABOR MARKET LAND HOLDINGS LAND REFORMS LAND TENURE LEGISLATION LENDERS LENDING POLICIES LEVERAGE LOAN LOAN DEFAULTS LOAN DELINQUENCIES LOAN PAYMENTS LOAN PERFORMANCE LOAN REPAYMENT LOAN SIZE LOAN SIZES LOCAL BANK LOCAL BUSINESS MACROECONOMICS MANDATE MARKET CONDITIONS MARKET DATA MARKET FAILURES METROPOLITAN AREAS MICRO-DATA MICRODATA MONETARY VALUES MORAL HAZARD MORTGAGE MORTGAGE DEBT MORTGAGE HOLDERS MORTGAGE MARKET MORTGAGES NEW CREDIT NON-PERFORMING LOAN NON-PERFORMING LOANS NPL PENALTIES POLICY RESPONSE POLITICAL ECONOMY POSITIVE EFFECTS PRODUCTIVE INVESTMENT PRODUCTIVE INVESTMENTS PRODUCTIVITY RECAPITALIZATION RECAPITALIZATIONS RECESSIONS REGIONAL RURAL BANKS REINVESTMENT RENEGOTIATION REPAYMENT CAPACITY RESERVE RESERVE BANK RESERVE BANK OF INDIA RESTRUCTURING PROGRAM RESTRUCTURING PROGRAMS RETURNS RURAL BANKS RURAL CREDIT SETTLEMENT SETTLEMENTS SHARE OF CREDIT SHARE OF DEBT SHORT MATURITY SOCIAL BANKING SOURCE OF CREDIT SOURCE OF INFORMATION STATE BANKS SUPPLY OF CREDIT TAX TAX CODE TOTAL REVENUE TRANSPARENCY UNION VOTERS WAGES |
| spellingShingle |
ACCESS TO CREDIT ACCESS TO EXTERNAL FINANCE ACCOUNTING ADMINISTRATIVE BODY AFFORDABILITY AGRICULTURAL CREDIT AGRICULTURAL DEBT AGRICULTURAL LOANS AGRICULTURAL SECTOR AGRICULTURE ALLOCATION OF CREDIT AMOUNT OF CREDIT AMOUNT OF DEBT ASSETS AUDITS BAD DEBTS BAILOUT BAILOUTS BALANCE SHEET BALANCE SHEETS BANK BAILOUTS BANK BRANCH BANK BRANCHES BANK CREDIT BANK LENDING BANK LIQUIDITY BANK POLICY BANKING REGULATIONS BASE YEAR BENCHMARK BENEFICIARIES BENEFICIARY BORROWER BORROWER BEHAVIOR BORROWING BRANCH BANKING BUDGET DEFICITS BUSINESS CYCLES CD CENTRAL BANK CHECKS COLLATERAL COMMERCIAL BANKS COMMODITY PRICES CONDITIONAL DEBT CONSUMER CREDIT CONSUMER CREDIT CARD CONSUMERS CONSUMPTION EXPENDITURE CORRUPTION COST OF DEBT COSTS OF CREDIT CREDIT ALLOCATION CREDIT CONTRACTS CREDIT CULTURE CREDIT DISCIPLINE CREDIT LOSSES CREDIT MARKET CREDIT MARKETS CREDIT OUTSTANDING CREDIT RATIONING CREDIT SPREADS CREDITS DEBT DEBT CONTRACTS DEBT LEVELS DEBT OVERHANG DEBT RELIEF DEBT RESTRUCTURING DEBTS DEFAULT RATES DEFAULTERS DEFAULTS DEPENDENT DEVELOPMENT POLICY DISTRIBUTION OF CREDIT DUMMY VARIABLE DUMMY VARIABLES DURABLE ECONOMIC ACTIVITY ECONOMIC CRISIS ECONOMIC HISTORY ECONOMIC OUTCOMES ECONOMIC PERFORMANCE ECONOMIC POLICY ECONOMIC SHOCKS ECONOMIC TRENDS EFFECT OF DEBT ELASTICITY ELIGIBILITY CRITERIA ELIGIBLE BORROWERS EMERGING MARKET EMERGING MARKETS EMPLOYMENT EVERGREENING EXCLUSION EXISTING CREDIT EXTERNAL FINANCE EXTERNAL FINANCING FARM LOANS FARMERS FINANCIAL ASSISTANCE FINANCIAL CONSTRAINTS FINANCIAL CRISIS FINANCIAL DEVELOPMENT FINANCIAL INTERMEDIARIES FINANCIAL INTERMEDIATION FINANCIAL SECTOR FINANCIAL SHOCKS FORECLOSURE FORECLOSURES FUTURE CREDIT GDP GOVERNMENT INTERVENTION GOVERNMENT SPENDING HOME EQUITY HOUSEHOLD DEBT HOUSEHOLD DEBTS HOUSEHOLDS HOUSING IMPACT OF DEBT INDEBTED INDEBTEDNESS INSTITUTIONAL CREDIT INSTITUTIONAL ENVIRONMENT INSTITUTIONAL ENVIRONMENTS INSTRUMENT INTERNATIONAL BANK KEY CHALLENGE LABOR MARKET LAND HOLDINGS LAND REFORMS LAND TENURE LEGISLATION LENDERS LENDING POLICIES LEVERAGE LOAN LOAN DEFAULTS LOAN DELINQUENCIES LOAN PAYMENTS LOAN PERFORMANCE LOAN REPAYMENT LOAN SIZE LOAN SIZES LOCAL BANK LOCAL BUSINESS MACROECONOMICS MANDATE MARKET CONDITIONS MARKET DATA MARKET FAILURES METROPOLITAN AREAS MICRO-DATA MICRODATA MONETARY VALUES MORAL HAZARD MORTGAGE MORTGAGE DEBT MORTGAGE HOLDERS MORTGAGE MARKET MORTGAGES NEW CREDIT NON-PERFORMING LOAN NON-PERFORMING LOANS NPL PENALTIES POLICY RESPONSE POLITICAL ECONOMY POSITIVE EFFECTS PRODUCTIVE INVESTMENT PRODUCTIVE INVESTMENTS PRODUCTIVITY RECAPITALIZATION RECAPITALIZATIONS RECESSIONS REGIONAL RURAL BANKS REINVESTMENT RENEGOTIATION REPAYMENT CAPACITY RESERVE RESERVE BANK RESERVE BANK OF INDIA RESTRUCTURING PROGRAM RESTRUCTURING PROGRAMS RETURNS RURAL BANKS RURAL CREDIT SETTLEMENT SETTLEMENTS SHARE OF CREDIT SHARE OF DEBT SHORT MATURITY SOCIAL BANKING SOURCE OF CREDIT SOURCE OF INFORMATION STATE BANKS SUPPLY OF CREDIT TAX TAX CODE TOTAL REVENUE TRANSPARENCY UNION VOTERS WAGES Gine, Xavier Kanz, Martin The Economic Effects of a Borrower Bailout : Evidence from an Emerging Market |
| geographic_facet |
South Asia India |
| relation |
Policy Research Working Paper;No. 7109 |
| description |
This paper studies the credit market
implications and real effects of one the largest borrower
bailout programs in history, enacted by the government of
India against the backdrop of the 2008-2009 financial
crisis. The study finds that the stimulus program had no
effect on productivity, wages, or consumption, but led to
significant changes in credit allocation and an increase in
defaults. Post-program loan performance declines faster in
districts with greater exposure to the program, an effect
that is not driven by greater risk-taking of banks. Loan
defaults become significantly more sensitive to the
electoral cycle after the program, suggesting the
anticipation of future credit market interventions as an
important channel through which moral hazard in loan
repayment is intensified. |
| format |
Publications & Research :: Policy Research Working Paper |
| author |
Gine, Xavier Kanz, Martin |
| author_facet |
Gine, Xavier Kanz, Martin |
| author_sort |
Gine, Xavier |
| title |
The Economic Effects of a Borrower Bailout : Evidence from an Emerging Market |
| title_short |
The Economic Effects of a Borrower Bailout : Evidence from an Emerging Market |
| title_full |
The Economic Effects of a Borrower Bailout : Evidence from an Emerging Market |
| title_fullStr |
The Economic Effects of a Borrower Bailout : Evidence from an Emerging Market |
| title_full_unstemmed |
The Economic Effects of a Borrower Bailout : Evidence from an Emerging Market |
| title_sort |
economic effects of a borrower bailout : evidence from an emerging market |
| publisher |
World Bank Group, Washington, DC |
| publishDate |
2014 |
| url |
http://documents.worldbank.org/curated/en/2014/11/20378033/economic-effects-borrower-bailout-evidence-emerging-market http://hdl.handle.net/10986/20656 |
| _version_ |
1764446967304290304 |
| spelling |
okr-10986-206562021-04-23T14:03:59Z The Economic Effects of a Borrower Bailout : Evidence from an Emerging Market Gine, Xavier Kanz, Martin ACCESS TO CREDIT ACCESS TO EXTERNAL FINANCE ACCOUNTING ADMINISTRATIVE BODY AFFORDABILITY AGRICULTURAL CREDIT AGRICULTURAL DEBT AGRICULTURAL LOANS AGRICULTURAL SECTOR AGRICULTURE ALLOCATION OF CREDIT AMOUNT OF CREDIT AMOUNT OF DEBT ASSETS AUDITS BAD DEBTS BAILOUT BAILOUTS BALANCE SHEET BALANCE SHEETS BANK BAILOUTS BANK BRANCH BANK BRANCHES BANK CREDIT BANK LENDING BANK LIQUIDITY BANK POLICY BANKING REGULATIONS BASE YEAR BENCHMARK BENEFICIARIES BENEFICIARY BORROWER BORROWER BEHAVIOR BORROWING BRANCH BANKING BUDGET DEFICITS BUSINESS CYCLES CD CENTRAL BANK CHECKS COLLATERAL COMMERCIAL BANKS COMMODITY PRICES CONDITIONAL DEBT CONSUMER CREDIT CONSUMER CREDIT CARD CONSUMERS CONSUMPTION EXPENDITURE CORRUPTION COST OF DEBT COSTS OF CREDIT CREDIT ALLOCATION CREDIT CONTRACTS CREDIT CULTURE CREDIT DISCIPLINE CREDIT LOSSES CREDIT MARKET CREDIT MARKETS CREDIT OUTSTANDING CREDIT RATIONING CREDIT SPREADS CREDITS DEBT DEBT CONTRACTS DEBT LEVELS DEBT OVERHANG DEBT RELIEF DEBT RESTRUCTURING DEBTS DEFAULT RATES DEFAULTERS DEFAULTS DEPENDENT DEVELOPMENT POLICY DISTRIBUTION OF CREDIT DUMMY VARIABLE DUMMY VARIABLES DURABLE ECONOMIC ACTIVITY ECONOMIC CRISIS ECONOMIC HISTORY ECONOMIC OUTCOMES ECONOMIC PERFORMANCE ECONOMIC POLICY ECONOMIC SHOCKS ECONOMIC TRENDS EFFECT OF DEBT ELASTICITY ELIGIBILITY CRITERIA ELIGIBLE BORROWERS EMERGING MARKET EMERGING MARKETS EMPLOYMENT EVERGREENING EXCLUSION EXISTING CREDIT EXTERNAL FINANCE EXTERNAL FINANCING FARM LOANS FARMERS FINANCIAL ASSISTANCE FINANCIAL CONSTRAINTS FINANCIAL CRISIS FINANCIAL DEVELOPMENT FINANCIAL INTERMEDIARIES FINANCIAL INTERMEDIATION FINANCIAL SECTOR FINANCIAL SHOCKS FORECLOSURE FORECLOSURES FUTURE CREDIT GDP GOVERNMENT INTERVENTION GOVERNMENT SPENDING HOME EQUITY HOUSEHOLD DEBT HOUSEHOLD DEBTS HOUSEHOLDS HOUSING IMPACT OF DEBT INDEBTED INDEBTEDNESS INSTITUTIONAL CREDIT INSTITUTIONAL ENVIRONMENT INSTITUTIONAL ENVIRONMENTS INSTRUMENT INTERNATIONAL BANK KEY CHALLENGE LABOR MARKET LAND HOLDINGS LAND REFORMS LAND TENURE LEGISLATION LENDERS LENDING POLICIES LEVERAGE LOAN LOAN DEFAULTS LOAN DELINQUENCIES LOAN PAYMENTS LOAN PERFORMANCE LOAN REPAYMENT LOAN SIZE LOAN SIZES LOCAL BANK LOCAL BUSINESS MACROECONOMICS MANDATE MARKET CONDITIONS MARKET DATA MARKET FAILURES METROPOLITAN AREAS MICRO-DATA MICRODATA MONETARY VALUES MORAL HAZARD MORTGAGE MORTGAGE DEBT MORTGAGE HOLDERS MORTGAGE MARKET MORTGAGES NEW CREDIT NON-PERFORMING LOAN NON-PERFORMING LOANS NPL PENALTIES POLICY RESPONSE POLITICAL ECONOMY POSITIVE EFFECTS PRODUCTIVE INVESTMENT PRODUCTIVE INVESTMENTS PRODUCTIVITY RECAPITALIZATION RECAPITALIZATIONS RECESSIONS REGIONAL RURAL BANKS REINVESTMENT RENEGOTIATION REPAYMENT CAPACITY RESERVE RESERVE BANK RESERVE BANK OF INDIA RESTRUCTURING PROGRAM RESTRUCTURING PROGRAMS RETURNS RURAL BANKS RURAL CREDIT SETTLEMENT SETTLEMENTS SHARE OF CREDIT SHARE OF DEBT SHORT MATURITY SOCIAL BANKING SOURCE OF CREDIT SOURCE OF INFORMATION STATE BANKS SUPPLY OF CREDIT TAX TAX CODE TOTAL REVENUE TRANSPARENCY UNION VOTERS WAGES This paper studies the credit market implications and real effects of one the largest borrower bailout programs in history, enacted by the government of India against the backdrop of the 2008-2009 financial crisis. The study finds that the stimulus program had no effect on productivity, wages, or consumption, but led to significant changes in credit allocation and an increase in defaults. Post-program loan performance declines faster in districts with greater exposure to the program, an effect that is not driven by greater risk-taking of banks. Loan defaults become significantly more sensitive to the electoral cycle after the program, suggesting the anticipation of future credit market interventions as an important channel through which moral hazard in loan repayment is intensified. 2014-12-04T00:06:30Z 2014-12-04T00:06:30Z 2014-11 http://documents.worldbank.org/curated/en/2014/11/20378033/economic-effects-borrower-bailout-evidence-emerging-market http://hdl.handle.net/10986/20656 English en_US Policy Research Working Paper;No. 7109 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank Group, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research South Asia India |