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Does Financial Liberalization Lower Problem Loans in Banks?
Author(s) -
Ghosh Saibal
Publication year - 2007
Publication title -
economic notes
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.274
H-Index - 19
eISSN - 1468-0300
pISSN - 0391-5026
DOI - 10.1111/j.1468-0300.2007.00179.x
Subject(s) - liberalization , financial system , robustness (evolution) , business , finance , economics , monetary economics , market economy , biochemistry , chemistry , gene
The paper explores whether financial liberalization promotes improved credit risk management in Indian banking in the form of fewer problem loans. Using annual data on state‐owned banks for the period 1996–2005, the paper finds that, after controlling for a myriad of factors, financial liberalization is influential in lowering banks' problem loans. Robustness tests reinforce these findings .