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GFDR 2013: Rethinking the role of the State in Finance

Stock market charts — Photo Credit: iStockphoto © loveguli

What is the size of financial institutions and markets, financial access, efficiency, and stability?

State as Regulator — Photo Credit: iStockphoto © andipantz

What are the common traits among countries that were hit hard by the crisis versus those that fared better?

Bank Competition — Photo Credit: iStockphoto © MachineHeadz

Was the crisis caused by “too much competition” among banks?

State Interventions — Photo Credit: iStockphoto © Sivakumar Sathiamoorthy

Can lending by state-owned banks stabilize aggregate credit in a crisis?

Financial Infrastructure — Photo Credit: iStockphoto © webphotographeer

How can the state best promote transparency of information and reduce counterparty risk?

The worldwide financial crisis brought into relief the role of financial systems in economic development and poverty reduction. The World Bank’s first-ever Global Financial Development Report contributes to the policy debates on this topic, building on new datasets, surveys, research and country experience, emphasizing the perspective of low- and middle-income countries. The report re-examines a basic question highlighted by the crisis: what is the proper role of the state in financial development? Read the Report's FAQs »

Watch Asli Demirguc-Kunt introducing GFDR

Main Messages

The report’s overall message is cautionary. The global financial crisis has given greater credence to the idea that active state involvement in the financial sector can help maintain economic stability, drive growth, and create jobs. There is evidence that some interventions may have had an impact, at least in the short run. But there is also evidence on potential longer term negative effects. The evidence also suggests that, as the crisis subsides, there may be a need to adjust the role of the state from direct interventions to less direct involvement. This does not mean that the state should withdraw from overseeing finance. To the contrary, the state has a very important role, especially in providing supervision, ensuring healthy competition, and strengthening financial infrastructure.

Main Messages in English | Watch Related Video

Main Messages in (pdf): Español | Français | Русский | عربي | Português | 中文

Key Links

Fill out the Financial Development Barometer
GFDR's Data
The Uneven Nature of Financial Systems (Illustration)

Download the Report

Global Financial Development Report 2013

Global Financial Development Report 2013 Rethinking the Role of Government in Finance

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