EFFECTS OF GOVERNMENT INTERVENTIONS ON BANK PERFORMANCE
EFFECTS OF GOVERNMENT INTERVENTIONS ON BANK PERFORMANCE
| Author: |
Mgr. Soňa Sivá |
| |
|
| Type: |
IES Working Papers |
| Year: |
2023 |
| Number: |
20 |
| ISSN / ISBN: |
|
| Published on: |
IES Working Papers 20/2023 |
| Publishing place: |
Praha |
|
|
bailout, financial crisis, bank performance |
| JEL codes: |
G21, G28 |
|
|
Sivá S. (2023): "Effects of Government Interventions on Bank Performance" IES Working Papers 20/2023. IES FSV. Charles University. |
| Abstract: |
This paper evaluates the effects of government bailout policies on bank performance in the EU banking sector. Using a unique dataset of government supports, I identify banks which received state support in years 2008-2014 and corresponding control group of banks. I apply difference-in-differences method and extend it by propensity score matching and inverse probability of weighting methods to account for non-randomness of a treatment. My results suggest that aided banks overtook non-aided ones in terms of lending activity in both, the EU Core and EU Periphery, but it was accompanied by increased non-performing loans ratio (NPL) in the EU Periphery. Finally, I show these results differ from the developments in the US. TARP recipients improved their capital adequacy compared to non-intervened banks and returned to pre-crisis level in terms of NPL and profitability. |
| Downloadable: |
wp_2023_20_siva.pdf |
