State-Run Banks, Money Growth, and the Real Economy

Within countries, individual state-run banks’ lending correlates with prior money growth; similar private-sector banks’ lending does not. Aggregate credit and investment growth correlate with prior money growth more where banking systems are more state-run. Size and liquidity differences between state-run and private-sector banks do not drive these results; further tests discount broad classes of alternative explanations. Tests exploiting heterogeneity in political pressure on state-run banks associated with privatizations and elections suggest a command-and-control pseudo-monetary policy channel: changes in money growth, perhaps reflecting political pressure on the central bank, change banks’ lending constraints; political pressure actually changes state-run banks’ lending. This paper was accepted by Tomasz Piskorski, finance.

• 저널Management Science · 65(12) · 5914–5932
• 토픽Banking stability, regulation, efficiency · Finance
• DOI10.1287/mnsc.2018.3111
• 저자Randall Mørck, M. Deniz Yavuz, Bernard Yeung