The nationalisation of banks as a result of the global economic crisis has been a source of controversy. In an article in VOX that draws on some recent research on government owned banks, Svetlana Andrianova, Anja Shortland and I argue that governments should not feel pressured to re-privatise the banks.
Once the black sheep of high finance, government owned banks can reassure depositors about the safety of their savings and can help maintain a focus on productive investment in a world in which effective financial regulation remains more of an aspiration than a reality.
Further reading:
Svetlana Andrianova Panicos Demetriades Anja Shortland
"There should be no rush to privatise government owned banks", VOX, 20 January 2010.
http://www.voxeu.org/index.php?q=node/4647
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