Author (s): 

Zeynep Önder and Süheyla Özyıldırım

Abstract: 

We examine the real effects of credit supply volatility in emerging economies. In countries with highly effective governments, government-owned banks play a significant role in reducing the effect of credit supply volatility on macroeconomic volatility. Conversely, foreign banks do not significantly change this effect. Furthermore, the presence of government-owned banks as development banks plays a positive role in stabilizing the economy during a sovereign or currency crisis. In countries where foreign banks dominate the banking sector, these banks amplify the adverse effect of a volatile credit supply on the volatilities in output, consumption, and investment growth rates, especially during a banking crisis.

Keywords: 

Credit supply volatility; Government-owned banks; Development banks; Foreign banks; Macroeconomic volatility

Citation: 

Önder, Z., & Özyıldırım, S. (2024). Bank ownership, credit supply volatility, and macroeconomic volatility. Journal of Banking & Finance, 163, 107183.

Link: 

https://www.sciencedirect.com/science/article/pii/S0378426624001006