This paper finds that lending by state banks is less procyclical than lending by private banks, especially in countries … with good governance. Lending by state banks in high-income countries is even countercyclical. On the liability side, state … banks expand potentially unstable non-deposit liabilities relatively little during booms, especially in countries with good …

In recent years, assets of non-bank financial intermediaries (NBFIs) have grown significantly relative to those of … banks. These two sectors are commonly viewed either as operating in parallel, performing different activities, or as … substitutes, performing substantially similar activities, with banks inside and NBFIs outside the perimeter of banking regulation …