Are public banks a “necessary evil”? : an analysis on the impacts of public ownership in banks

• Autor(a) principal: Brochado, Bernardo de Valadares Serrão e Fernandes
• Data de Publicação: 2018
• Tipo de documento: Dissertação
• Idioma: eng
• Título da fonte: Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)
• Texto Completo: http://hdl.handle.net/10400.14/25492
• topic: Banks; Eurozone; Ownership; Profitability; Efficiency; Risk; Corporate Governance; Bancos; Zona Euro; Estrutura acionista; Lucratividade; Eficiência; Risco; Governo das empresas; Domínio/Área Científica::Ciências Sociais::Economia e Gestão

This thesis studies the impacts of ownership in the Eurozone banks in the period from 2011 to 2016. Three main moments are found in previous literature: The first moment, from the 1960s to the 1990s, was characterized by a lack of comprehensive quantitative research. The second period starts with La Porta et al.’s (2002) critique on public banks. A profusion of research on public ownership of banks followed, generally presenting evidence that public banks tend to be less efficient, less profitable and riskier. With the financial crisis of 2007/2008, many banks were nationalized and the discussion about the impacts of public ownership restarted. In this context, I wanted to understand whether ownership continues to produce the same effects and whether those effects are dependent on the country where the bank is located. By using a Random Effects model, this thesis finds evidence that public ownership tends to decrease both profitability and efficiency. Additionally, evidence was found that effects of ownership on risk are dependent on the country where the bank is located. These results are interesting considering that the banks in the sample are mainly regulated by the same entity, the ECB. This raises the question of what mechanisms should be put in place to enhance the performance of these banks.