Bank Ownership: Trends and Implications

IMF Working Papers, March 22, 2017

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Bank Ownership: Trends and Implications

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Bibliographic details

• Authors: Robert Cull, Jeanne Verrier
• Published: March 22, 2017
• Series: IMF Working Papers
• DOI: https://doi.org/10.5089/9781475588125.001

Executive summary and research focus

• Presents recent trends in bank ownership across countries.
• Summarizes the evidence regarding the implications of bank ownership structure for:
  • bank performance and competition,
  • financial stability,
  • access to finance.

Key findings on foreign-owned banks

• "Foreign-owned banks are more efficient than domestic banks in developing countries."
• "Foreign-owned banks promote competition in host banking sectors."
• "Foreign-owned banks help stabilize credit when host countries face idiosyncratic shocks."
• Tradeoffs identified:
  • "Foreign-owned banks can transmit external shocks."
  • "Foreign-owned banks might not always expand access to credit."

Key findings on government-owned banks

• "The record on the impact of government bank ownership suggests few benefits, especially for developing countries."

Subjects and keywords (as listed)

• Subjects: Bank credit, Banking, Commercial banks, Competition, Credit, Financial institutions, Financial markets, Foreign banks, Money
• Keywords: Bank credit, bank governance, bank ownership, bank participation, bank share, Central and Eastern Europe, Central Asia, Commercial banks, Competition, Credit, Eastern Europe, financial globalization, foreign bank, foreign banks, Global, government bank lending, government bank participation, government ownership, government-owned bank, ownership structure, privatization, South Asia, state-owned banks, WP

Policy-relevant implications (derived from summarized evidence)

• Potential benefits of foreign ownership in developing countries include improved efficiency, increased competition, and credit stabilization during idiosyncratic shocks.
• Policymakers should balance benefits against risks that foreign ownership can transmit external shocks and may not expand access to credit.
• The limited benefits from government bank ownership imply that reliance on state ownership is unlikely to yield broad efficiency or access gains in developing-country contexts.

Source: IMF Working Paper — "Bank Ownership: Trends and Implications", Robert Cull and Jeanne Verrier, March 22, 2017.

Content in this bundle

• Bank Ownership: Trends and Implications, WP/17/60, March 2017
  • Bank Ownership: Trends and Implications, WP/17/60, March 2017 (Markdown version)
  • Bank Ownership: Trends and Implications, WP/17/60, March 2017 (PDF)