Template-Type: ReDIF-Paper 1.0
Author-Name:  Alfredo Schclarek
Author-Name-First: Alfredo
Author-Name-Last: Schclarek
Author-Name:  Jiajun Xu
Author-Name-First: Jiajun
Author-Name-Last: Xu
Author-Name:  Jianye Yan
Author-Name-First: Jianye
Author-Name-Last: Yan
Title: The Maturity Lengthening Role of National Development Banks.
Abstract:  This paper theoretically discusses why state-owned national develop- ment banks (NDBs) may be better able to provide longer-term lending to firms (investors), in comparison to private commercial banks (CBs). NDBs can grant longer-term lending to firms (investors) because NDB bonds have more value than the bonds issued by CBs, thus allowing banks to better cope with maturity mismatch risks and liquidity problems in case of needing to make interbank payments. The reason that NDB bonds have more value than the bonds issued by CBs is that NDBs are owned by the government, hence there is a higher recapitalization willingness and capac- ity compared to private bank owners. Regarding the maturity lengthening role of NDBs, it is positively related to the amount of liquid asset holdings by NDBs, the collateral value of the investment projects that receive NDB financing, and the recapitalization willingness (or perceived willingness) and financial strength, and net worth, of the government.
Length:  26 pages
Creation-Date:  2019-11
File-URL: https://aaep.org.ar/works/works2019/poinsot.pdf
File-Format: Application/pdf
Number: 4197
Classification-JEL: G01, G21, G28, H81, E51, E44
Keywords: Bank lending; Maturity lengthening; Debt or collateral capacity; Asset-based leverage; Interbank markets; Recapitalization; National development banks
Handle: RePEc:aep:anales:4197