IMPACT OF PUBLIC BANKS ON STABILITY OF FINANCIAL SYSTEM

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Published:
Dec 28, 2013
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No. 10(59) (2013)
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Krzysztof Kluza
Szkoła Główna Handlowa w Warszawie, Katedra Rynków i Instytucji Finansowych

DOI: https://doi.org/10.22630/PEFIM.2013.10.59.87
Keywords : public banks, financial stability, inefficiency of public entities
Abstract
Public banks are important components of financial markets in many countries. Their goal is to implement social and economic policies of governments. Their activity should have positive impact on economy and stability of financial sector. After the first phase of the crisis their main stabilization function includes provision of long-term financing and countercyclical policies supporting investment demand in domestic economy. However, like all public institutions these banks are prone to microeconomic and macroeconomic mechanisms, which distort their actions and may lead to decrease of social welfare. This paper outlines potential inefficiencies, which may arise as an effect of public bank activities, as well as a short description of banks which experienced such events on a large scale. There are also presented recommendations how to prevent materialization of such scenarios in a future.

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How to Cite
Kluza, K. (2013). IMPACT OF PUBLIC BANKS ON STABILITY OF FINANCIAL SYSTEM. The Scientific Journal European Policies, Finance and Marketing, (10(59), 343–352. https://doi.org/10.22630/PEFIM.2013.10.59.87
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