Alejandro Micco & Ugo Panizza • http://www.iadb.org • February 25, 2005
Public Banks in Latin America
Background paper prepared for the conference on Public Banks in Latin America: Myth and Reality Inter-American Development Bank (February 25, 2005)
Government ownership of banks is a major phenomenon worldwide. In 1995 the average percentage of state ownership in the banking industry around the world was about 41.6 percent (Figure 1). This share was even larger during the 1970s, when more than 50 percent of worldwide bank assets were controlled by the public sector. Ideological changes regarding the state’s role in the economy, as well as financial crises, led governments to privatize financial institutions. Megginson (2004) documents that worldwide, from 1987 to 2003 more than 250 banks were privatized, raising US$143 billion.
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