The Global Financial Crisis and Indian Banks: Survival of the Fittest?
AbstractThe Indian banking system was initially thought to be insulated from the global financial crisis owing to heavy public ownership and cautious management. It was thus a surprise when some banks experienced a deposit flight, as depositors shifted their money toward government-owned banks and specifically toward the State Bank of India, the largest public bank. While there was some tendency for depositors to favour healthier banks and the banks with more stable funding, the reallocation of deposits toward the State Bank of India in particular cannot be explained by these factors alone. Nor can it be explained by the impact of explicit capital injections by the government into some public-sector banks. Rather it appears that the implicit guarantee of the liabilities of the country's largest public bank dominated other considerations.
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Bibliographic InfoPaper provided by National Institute of Public Finance and Policy in its series Working Papers with number 12/113.
Date of creation: Dec 2012
Date of revision:
Note: Working Paper 113, 2012
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Other versions of this item:
- Eichengreen, Barry & Gupta, Poonam, 2012. "The global financial crisis and indian banks: survival of the fittest?," MPRA Paper 43365, University Library of Munich, Germany.
- G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
- G20 - Financial Economics - - Financial Institutions and Services - - - General
- G01 - Financial Economics - - General - - - Financial Crises
- G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
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1030, Federal Reserve Bank of Chicago.
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