State-owned commercial banks

ABSTRACT This paper builds a new dataset on bank ownership and finds no evidence of a negative correlation between state-ownership of banks and economic growth. Banking crises predict increases in state-ownership but that there is no evidence that high state-ownership predicts banking crises. Contrary to past literature, the paper also shows that recent data show no difference between the profitability of private and public banks located in emerging and developing economies. The paper corroborates the existing literature which shows that in emerging and developing economies lending by state-owned banks is less procyclical than private bank lending.