State Owned Banks and anti-cyclical policy: an analysis of leverage and liquidity indicators from Caixa, Banco do Brazil and BNDES, in the period from 2005 to 2014

Abstract

This paper evaluates the use of state owned banks in the promotion of countercyclical policy for the Brazilian economy after the 2008 Crisis, based on a post-keynesian theoretical framework. The use of state owned banks in promoting development and as part of the countercyclical arsenal of governments is much discussed in this literature. The paper analyzes the indicators of leverage and liquidity of CEF, Banco do Brazil and BNDES in the period from 2005 to 2014, taking into account the financial conditions of these banks in those years and their performance in countercyclical credit policies in the post-crisis of 2008. The article concludes that the three Brazilian state owned banks had taken a more risky financial profile, reflecting their participation in the set of countercyclical policies taken when the private banking sector entered the process of post-crisis flight to liquidity.