State Financial Institutions : Mandates, Governance, and Beyond

Rudolph, Heinz P.

State Financial Institutions : Mandates, Governance, and Beyond

Autores

Descripción

There is no doubt that on average the performance of state financial institutions around the world has been below the lowest expectations. Lack of governance, management skills, regulation, and transparency, and misguided incentives have contributed to discredit these institutions for supporting the development of local financial markets. However, the pro-active role that some state financial institutions have played in the recent crisis in allocating credit to sectors cyclically not attractive for commercial banks has brought back the question of whether some state ownership in the banking system would be preferable. This paper analyzes the experience of four state financial institutions that have performed relatively well in the past: Canada's Business Development Bank, Chile's BancoEstado, South Africa's Development Bank of Southern Africa, and Finland's Finnvera plc. The author finds that these institutions have different checks and balances to mitigate eventual mismanagement of resources. The author also finds that little progress has been made in measuring the policy performance of these institutions.

Palabras clave

ACCESS TO CREDIT, ACCESS TO FINANCE, ACCESS TO FINANCIAL SERVICES, AFFILIATES, AGRICULTURAL SECTOR, ALLOCATION OF FUNDS, ASSET LIABILITY MANAGEMENT, BANKING ACCOUNTS, BANKING CRISES, BANKING CRISIS, BANKING INDUSTRY, BANKING INSTITUTION, BANKING SECTOR, BANKING SYSTEM, BANKRUPTCY, BOARD MEMBERS, BOARDS OF DIRECTORS, BOND, BOND MARKET, BONDS, BUSINESS DEVELOPMENT, BUSINESS DEVELOPMENT BANK, BUSINESS FAILURE, BUSINESS STRATEGY, BUSINESS SURVIVAL, CAPITAL ADEQUACY, CAPITAL ADEQUACY RATIOS, CAPITAL ALLOCATION, CASH MANAGEMENT, CEO, CHECKS, COLLECTIVE, COMMERCIAL BANK, COMMERCIAL BANKS, COMMERCIAL PRACTICE, COMMERCIAL PRACTICES, COMMERCIAL RELATIONSHIP, COMPANY, COMPETITIVE MARKETS, CONFLICTS OF INTEREST, CONSULTING SERVICES, CONTINGENT LIABILITIES, CORPORATE GOVERNANCE, CORPORATE GOVERNANCE LAWS, CORPORATE LAW, CORPORATION, COST OF CAPITAL, CREDIT AGENCY, CREDIT ALLOCATION, CREDIT DECISIONS, CREDIT MARKET, CREDIT PORTFOLIOS, CREDITS, CROSS SUBSIDIES, CROSS SUBSIDIZATION, DEBT, DEBT MARKET, DEPOSIT, DEPOSIT TAKING INSTITUTIONS, DEPOSITORS, DEPOSITS, DERIVATIVE, DERIVATIVE PRODUCTS, DERIVATIVES, DEVELOPMENT ASSISTANCE, DEVELOPMENT BANK, DEVELOPMENT BANKS, DEVELOPMENT FINANCE, DISBURSEMENT, DIVERSIFICATION, EARNINGS, ECONOMIC GROWTH, EMERGING MARKETS, EMPLOYMENT, EMPLOYMENT GROWTH, ENTREPRENEURIAL ACTIVITIES, ENTREPRENEURSHIP, EQUITY INVESTMENTS, EXCHANGE RATE, EXTERNALITIES, FARMERS, FINANCIAL DEVELOPMENT, FINANCIAL INNOVATION, FINANCIAL INSTITUTION, FINANCIAL INSTITUTIONS, FINANCIAL MARKET, FINANCIAL MARKETS, FINANCIAL PERFORMANCE, FINANCIAL PRODUCTS, FINANCIAL SERVICES, FINANCIAL SUPPORT, FINANCIAL SUSTAINABILITY, FINANCIAL SYSTEMS, FINANCIAL TECHNOLOGY, FIXED COSTS, FUNDING SOURCES, GOOD CORPORATE GOVERNANCE, GOVERNANCE ISSUES, GOVERNANCE SYSTEM, GOVERNANCE SYSTEMS, GOVERNMENT ACCOUNTS, GOVERNMENT FUNDING, GOVERNMENT INTERVENTION, GOVERNMENT OWNERSHIP, GOVERNMENT POLICIES, GOVERNMENT SUPPORT, HOUSEHOLDS, HOUSING, IMPLICIT SUBSIDY, INCORPORATED, INDEPENDENT DIRECTORS, INDIVIDUALS, INDUSTRIAL POLICY, INFLATION, INFRASTRUCTURE FINANCING, INSTITUTIONAL INVESTORS, INSURANCE, INTEREST RATE, INTEREST RATE RISK, INTEREST RATES, INTERNATIONAL BANK, INVESTING, INVESTMENT ACTIVITIES, INVESTMENT PROJECTS, INVESTMENT SPENDING, JOB CREATION, LACK OF TRANSPARENCY, LARGE COMPANIES, LAWS, LENDER, LIABILITY, LIABILITY MANAGEMENT, LIABILITY SIDE, LIMITED, LINES OF CREDIT, LIQUIDITY, LOCAL FINANCIAL MARKETS, LONG-TERM COST, LONG-TERM FUNDING, MANAGERS, MANDATE, MANDATES, MARKET BENCHMARKS, MARKET CONDITIONS, MARKET DEVELOPMENTS, MARKET DISCIPLINE, MARKET FAILURE, MARKET FAILURES, MARKET LEVELS, MARKET PARTICIPANTS, MARKET SHARE, MATURITY, MICROENTERPRISES, MISMANAGEMENT, MONETARY POLICY, MORTGAGE, MORTGAGE FINANCING, MORTGAGE LENDING, MORTGAGES, MUNICIPALITIES, OPERATING LOSSES, OPERATIONAL COSTS, PARTIAL GUARANTEES, PARTNERSHIP, PERSONS, PORTFOLIO, PORTFOLIOS, PRIVATE BANKS, PRIVATE ENTERPRISES, PRIVATIZATION, PRODUCTIVITY, PROFESSIONAL QUALIFICATIONS, PROFITABILITY, PROFITABLE BUSINESS, PROFITABLE BUSINESSES, PRUDENTIAL STANDARDS, PRUDENTIAL SUPERVISION, PUBLIC COMPANIES, PUBLIC ENTERPRISES, PUBLIC FINANCE, PUBLIC POLICY, RATE OF RETURN, RECAPITALIZATION, RECESSION, REGULATORY FORBEARANCE, REGULATORY FRAMEWORK, REGULATORY REFORM, RETURN, RETURN ON EQUITY, RETURNS, RISK ASSESSMENTS, RISK AVERSION, RISK MANAGEMENT, RISK MANAGEMENT SYSTEM, RISK MANAGEMENT SYSTEMS, SAVINGS, SECURITIES, SELF-FINANCING, SHAREHOLDER, SHAREHOLDERS, SMALL BUSINESSES, STAKEHOLDERS, START-UP, START-UPS, STATE OWNED BANKS, STATE OWNED COMPANIES, SUBSIDIARY, SUPERVISORY BOARD, SUPERVISORY BOARDS, SUPERVISORY FRAMEWORK, SUPPLY OF FINANCING, TECHNICAL ASSISTANCE, TRADE UNIONS, TRANSPARENCY, TREASURY, UNIVERSAL BANK, VENTURE CAPITAL, WAGES, WHOLESALE FUNDING, YIELD CURVE