Affiliation:
1. Department of Finance, University of Illinois at Chicago, Government Finance Research Center, CESifo , Chicago, IL, USA
Abstract
Abstract
The possibility of creating a state bank has received much recent attention in the USA. In 2021, six states introduced legislation to create a state bank; in 2019, similar legislation was enacted in California for municipal banks. This article develops a framework to evaluate state banking, reviews prior experiences with state banking and related alternatives to traditional private banking, and identifies five questions determining the advisability of creating a state bank. The overall goal is to shed some light on whether a state bank can be a useful tool to further state economic development and the welfare of state residents (JEL codes: G21 (banks), G28 (government policy, financial institutions), and H70 (state and local governments)).
Funder
Joyce Foundation
Government Finance Research Center
University of Illinois at Chicago
Publisher
Oxford University Press (OUP)
Subject
Economics and Econometrics,Geography, Planning and Development
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