Rural Finance

Only available on StudyMode
  • Download(s) : 98
  • Published : February 7, 2013
Open Document
Text Preview
WP/07/227

Public Financial Institutions in Developed Countries—Organization and Oversight Lev Ratnovski and Aditya Narain

© 2006 International Monetary Fund

WP/07/227

IMF Working Paper Monetary and Capital Markets Department Public Financial Institutions in Developed Countries—Organization and Oversight

Prepared by Lev Ratnovski and Aditya Narain Authorized for distribution by David Marston September 2007 Abstract This Working Paper should not be reported as representing the views of the IMF. The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate.

While public financial institutions (such as public development banks) are commonly associated with developing countries, in fact they are prevalent in the developed world as well. We study a sample of public financial institutions in industrialized countries and identify dominant trends in their organization and oversight. While practices in developed countries may be a useful reference point, a more nuanced approach, accounting for the disparity of institutional environment, regulatory capacity, and government accountability and effectiveness, may be required in developing countries. Further investment in the accumulation of evidence and formulation of best practices in the organization and oversight of public financial institutions seems warranted and necessary. This paper was prepared while Mr. Ratnovski was working in the Financial Supervision and Regulation Division during January–April 2006. The authors are grateful to Jonathan Fiechter, David Marston, and participants of an MCM seminar in April 2006 for their helpful comments. JEL Classification Numbers: G21, G28, H81 Keywords: Financial institutions, banking regulations, banking supervision Authors’ E-Mail Address: Lev.Ratnovski@bankofengland.co.uk and anarain@imf.org

2

Contents

Page

Introduction: Access to Finance and Public Policy ...................................................................3 A. Access to Finance......................................................................................................3 B. Fundamental Policies ................................................................................................4 C. Public Provision of Financial Services......................................................................6 D. Regulatory Perspective .............................................................................................7 E. Study Scope and Method...........................................................................................7 II. Rationale of Public Financial Institutions in Developed Countries ....................................11 A. Housing Finance .....................................................................................................11 B. Small- and Medium-size Enterprises/Innovation Finance ......................................12 C. Agriculture ..............................................................................................................13 D. Are These Rationales Always Valid? .....................................................................13 E. Other Common Types of Public Financial Institutions...........................................14 III. Organization of Public Financial Institutions in Developed Countries .............................16 A. Typical Financial Instruments.................................................................................16 B. Financing.................................................................................................................19 C. Ownership ...............................................................................................................20 D. The Importance of Focus...
tracking img