State Financial Institutions : Mandates, Governance, and Beyond

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 contribute...

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Bibliographic Details
Main Author:	Rudolph, Heinz P.
Format:	Policy Research Working Paper
Language:	English
Published:	2012
Subjects:	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
Online Access:	http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20091130094556 http://hdl.handle.net/10986/4334

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Summary:	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.

State Financial Institutions : Mandates, Governance, and Beyond

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