Bank ownership structure, lending corruption and the regulatory environment
Résumé
We empirically examine whether bank lending corruption is in
uenced by the
ownership structure of banks, a country's regulatory environment and its level of
economic development. We nd that corruption in lending is higher when state-
owned banks or family-owned banks provide a higher proportion of credit to the
economy, in both developed and developing countries. A stronger regulatory
environment, either through a stronger supervisory regime or a higher quality
of external audits, helps to curtail bank lending corruption if induced by family-
controlled ownership, but not if induced by state-controlled ownership. We further
nd that controlled-ownership of banks by other banks contributes to reduce
corruption in lending; the same applies to widely-held ownership of banks, but
only for developed countries