| Publication Type | | Preprints |
| Author | | Hendrik Hakenes, Isabel Schnabel |
| Year of Publication | | 2006 |
| Issue | | 2006/11 |
| Abstract | | This paper yields a rationale for why subsidized public banks may be desirable from a regional perspective in a financially integrated economy. We present a model with credit rationing and heterogeneous regions in which public banks prevent a capital drain from poorer to richer regions by subsidizing local depositors, for example, through a public guarantee. Under some conditions, cooperative banks can perform the same function without any subsidization; however, they may be crowded out by public banks. We also discuss the impact of the political structure on the emergence of public banks in a political-economy setting and the role of interregional mobility. |
| Pagination | | 33 |
| Publisher | | Max Planck Institute for Research on Collective Goods |
| Place Published | | Bonn |
| Export | | Tagged BibTex XML |
| Download | | |
| Supplementary Material | | |
| Keywords | | cooperative banks, capital drain, credit rationing, financial integration, privatization, Public banks |
| JEL-Codes | | G21, F36, H11, L33 |
