Public banks in mature financial sistems

Vol. 31 No. 3 (2011)

Jul-Sep / 2011
Published July 1, 2011
PDF-Portuguese (Português (Brasil))
PDF-Portuguese (Português (Brasil))

How to Cite

Hermann, Jennifer. 2011. “Public Banks in Mature Financial Sistems: Theoretical Perspectivas and Challenges to Developing Countries”. Brazilian Journal of Political Economy 31 (3):397-414.

Public banks in mature financial sistems

theoretical perspectivas and challenges to developing countries

Jennifer Hermann
Professora-adjunta do Instituto de Economia da Universidade Federal do Rio de Janeiro.
Brazilian Journal of Political Economy, Vol. 31 No. 3 (2011), Jul-Sep / 2011, Pages 397-414


The paper discusses two theoretical approaches to the role of public banks (PBs): the Shaw-McKinnon model and an alternative Keynesian view. In the former, the PBs still in operation in less developing countries would be near to become fully unnecessary, in view of the advance of their financial development in the last twenty years. In the Keynesian approach this hypothesis is unlikely. Financial markets are viewed as structurally inefficient and “incomplete” for the requirements of the process of economic development. Nevertheless, it is undeniable that economic and financial development will require a definition of new strategies for PBs. The paper is concluded with a brief discussion of this issue.

JEL classification: O16; G28; H81.

Keywords: economic development financial development governmental banks