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State ownership and bank equity in the Asia-Pacific region

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Author Info

  • Hossain, Mahmud
  • Jain, Pankaj K.
  • Mitra, Santanu

Abstract

Our study examines the effectiveness of worldwide banking regulations and government involvement in providing a balanced risk–reward trade-off to bank shareholders during both normal time periods and the periods of financial crisis. Ownership structure varies across world regions with government holding bigger stakes in the Asia-Pacific region and Latin America than in North America. Partial state ownership of banks, particularly in the Asia-Pacific region, helped avoid sharp losses during financial crises without sacrificing returns in normal periods. The restrictions on the types of activities reduce bank riskiness and wealth losses during the crisis period but they also stifle innovations and returns during normal time periods.

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Bibliographic Info

Article provided by Elsevier in its journal Pacific-Basin Finance Journal.

Volume (Year): 21 (2013)
Issue (Month): 1 ()
Pages: 914-931

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Handle: RePEc:eee:pacfin:v:21:y:2013:i:1:p:914-931

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Web page: http://www.elsevier.com/locate/pacfin

Related research

Keywords: State ownership; Bank regulation; International; Asia-Pacific; Financial crisis;

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References

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Citations

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Cited by:
  1. Jeon, Bang Nam & Lim, Hosung & Wu, Ji, 2014. "The impact of foreign banks on monetary policy transmission during the global financial crisis of 2008-2009: Evidence from Korea," School of Economics Working Paper Series 2014-7, LeBow College of Business, Drexel University.
  2. Inoguchi, Masahiro, 2013. "Interbank market, stock market, and bank performance in East Asia," Pacific-Basin Finance Journal, Elsevier, vol. 25(C), pages 136-156.

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