Bank privatization in Argentina : a model of political constraints and differential outcomes

Based on results from country case studies, many researchers have claimed that political constraints affect bank privatization transactions, which in turn affect the post-privatization performance of the banking sector. But no study has either econometrically tested how political constraints affect bank privatization transactions or theretically modeled the privatization transaction. The authors present a simple theoretical framework that models the inherent tradeoffs faced by governments and potential buyers in privatization transactions involving banks. The potential buyer is concerned about the probability that the bank will remain solvent, about the profits it will earn after privatization, and about the price paid for the assets and liabilities. The government is concerned about the price received for the assets, about layoffs, and about service coverage after privatization. The evidence from bank privatization transactions in Argentina in the 1990s supports several of their theoretical predictions. In particular, provinces with highfiscal deficits were willing to accept layoffs and to guarantee a larger part of the privatized banks'portfolio in return for a higher price. The tequila crisis (Mexico's economic crisis in 1994-95) meant that politicians could protect fewer jobs and had to assume a greater share of their public banks'assets. Evidence of better performance at banks privatized after Mexico's crisis suggests that, by tying politicians'hands, the crisis may have brought unforeseen benefits. This conjecture awaits further empirical validation, but the authors hope that by explicitly incorporating the incentives politicians face, analysis can begin to address the question of why some privatizations succeed more than others.Economic Theory&Research,International Terrorism&Counterterrorism,Banks&Banking Reform,Municipal Financial Management,Financial Crisis Management&Restructuring,Banks&Banking Reform,Municipal Financial Management,Economic Theory&Research,Financial Crisis Management&Restructuring,International Terrorism&Counterterrorism

Does foreign bank penetration reduce access to credit in developing countries"evidence from asking borrowers

Existing evidence on the effect of foreign bank penetration on lending to small and medium-size enterprises is ambiguous. Case studies of developing countries show that foreign banks lend less to such firms than domestic banks do. But cross-country studies find that foreign bank entry fosters competition and reduces interest rates, benefits that should extend to all firms. The authors use data from a large cross-country survey of enterprises to investigate this issue. Their results suggest that foreign bank penetration improves financing conditions (both the quantities of financing and the terms) for enterprises of all sizes, although it seems to benefit larger firms more.Banks&Banking Reform,Economic Theory&Research,Payment Systems&Infrastructure,Financial Intermediation,Financial Crisis Management&Restructuring,Banks&Banking Reform,Financial Intermediation,Financial Crisis Management&Restructuring,Municipal Financial Management,Economic Theory&Research

Bank lending to small businesses in Latin America : does Bank origin matter?

In recent years foreign bank participation has increased tremendously in Latin America. Some observers argue that foreign bank entry will benefit Latin American banking systems by reducing the volatility of loans and deposits and increasing efficiency. Others are concerned that foreign banks might choose to extend credit only to certain customers, leaving some sectors-such as small businesses-unserved. The authors examine this issue. Using bank-level data for Argentina, Chile, Colombia, and Peru during the mid-1990s, they empirically investigate whether bank origin affects the share and growth rate of bank lending to small businesses. They find that although foreign banks generally lent less to small businesses (as share of total lending) than private domestic banks, the difference is due primarily to the behavior of small foreign banks. The difference was considerably smaller for large and medium-sized banks. And in Chile and Colombia, large foreign banks might actually lend slightly more (as share of total lending) than large domestic banks.Financial Intermediation,Banks&Banking Reform,Financial Crisis Management&Restructuring,Payment Systems&Infrastructure,Economic Theory&Research,Banks&Banking Reform,Financial Intermediation,Financial Crisis Management&Restructuring,Economic Theory&Research,Banking Law

credit access in latin american enterprises

An intense process of deregulation and financial liberalization in Latin America has increased competitive pressures and led to bank restructuring and consolidation. This chapter looks at firm access to credit in the region, focusing on the role of credit market structure. Using firm-level data from the World Bank Enterprise Survey, we find that access to bank credit is very heterogeneous. On average, smaller and less productive firms are less likely to apply for credit and more likely to be financially constrained. We also find that a high degree of bank penetration and competition are significantly correlated with a lower probability that borrowers are financially constrained. The penetration of foreign banks has a negative effect on access to credit, particularly in less developed and more concentrated markets, while it has a positive influence in more competitive and financially developed markets

Disease-associated missense mutations in GluN2B subunit alter NMDA receptor ligand binding and ion channel properties.

Genetic and bioinformatic analyses have identified missense mutations in GRIN2B encoding the NMDA receptor GluN2B subunit in autism, intellectual disability, Lennox Gastaut and West Syndromes. Here, we investigated several such mutations using a near-complete, hybrid 3D model of the human NMDAR and studied their consequences with kinetic modelling and electrophysiology. The mutants revealed reductions in glutamate potency; increased receptor desensitisation; and ablation of voltage-dependent Mg block. In addition, we provide new views on Mg and NMDA channel blocker binding sites. We demonstrate that these mutants have significant impact on excitatory transmission in developing neurons, revealing profound changes that could underlie their associated neurological disorders. Of note, the NMDAR channel mutant GluN2B unusually allowed Mg permeation, whereas nearby N615I reduced Ca permeability. By identifying the binding site for an NMDAR antagonist that is used in the clinic to rescue gain-of-function phenotypes, we show that drug binding may be modified by some GluN2B disease-causing mutations