Title: SOEs as Intermediation: Leakage Effect under Financial Repression

Speaker: Zhiyong Yao, Fudan University

Host: Tong Zhang, Associate professor, RIEM

Time: 14:30-16:00, Dec.26, Friday

Venue: H515 Yide Hall, Liulin Campus



Abstract:

We show that under financial repression there exists a leakage effect between the state-owned enterprises (SOEs) and the private enterprises (PEs): The low-type SOEs borrow from the bank with the official interest rate, then relend the loans to the high-type PEs with the (black) market interest rate. When doing so, all three parties involved, the low-type SOEs, the high-type PEs, and the bank, are better off, and the inefficiency of financial repression is mitigated.
Keywords:

State-owned enterprises; Leakage Effect;