Rethinking the State’s Role in Finance (Cihák & Demirguç-Kunt)

Rethinking the state’s role in finance by Martin Cihák and Asli Demirguç-Kunt published by World Bank (4/2013) indicated by Alvaro Manoel. “…Evidence also suggests that instead of restricting competition, the state needs to encourage contestability through healthy entry of well-capitalized institutions and timely exit of insolvent ones. There is also new evidence that supports the state’s key role in promoting transparency of information and reducing counterparty risk. The challenge of financial sector policies is to better align private incentives with public interest, without taxing or subsidizing risk-taking.”