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Asia and Pacific > India

You are looking at 1 - 2 of 2 items for :

  • Type: Journal Issue x
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Cover IMF Working Papers
Revisiting the Stabilization Role of Public Banks: Public Debt Matters
H. Elif Ture
This paper revisits the stabilization role of public banks and analyzes whether weak public finances may hinder this role. During the global financial crisis (GFC), public banks were widely used to counter the private credit crunch and prop up the economy. Using cross-country bank-level data for 125 advanced and developing economies for 1999–2018, the paper finds public bank lending to be less procyclical than private bank lending on average, particularly during busts. A key result, however, is that in developing economies with high public debt levels, public bank lending has been more procyclical, particularly outside of the GFC period. This finding suggests high public debt can limit the stabilization role of public banks during domestic busts, likely reflecting higher financing costs public banks face and lower subsidies they receive in economies with tighter budget constraints.
Keywords:
Public banks; countercyclical lending; economic stabilization; high public debt; WP; public bank; bank lending; development bank; bank borrowing costs; doom loop
Cover Regional Economic Outlook, October 2020, Asia and Pacific
Regional Economic Outlook, October 2020, Asia and Pacific
Navigating the Pandemic: A Multispeed Recovery in Asia
International Monetary Fund. Asia and Pacific Dept

Abstract

The coronavirus disease (COVID-19) pandemic is still unfolding around the globe. In Asia, as elsewhere, the virus has ebbed in some countries but surged in others. The global economy is beginning to recover after a sharp contraction in the second quarter of 2020, as nationwide lockdowns are lifted and replaced with more targeted containment measures.

Keywords:
recovery; reopening; inequality; job loss; uncertainty; risk; lockdowns; exit strategy; REO; containment measure; virus containment; virus transmission rate; disproportionate impact; labor market survey