Government-owned banks have performed better in crisis

Government-owned banks have performed better in crisis

Graphics: Ahmed Raza Khan / Mint

Because of this large shift in the value of US’ largest bank and outperformance of the Indian banks, SBI’s market value relative to that of Citigroup has risen to 24% currently, up from just 8% in June 2007. The comparison tells us several things. The most obvious one is that banks in countries such as India and China have done better because they haven’t been holding the high level of toxic assets held by banks in developed countries.

The more important point, however, is that it seems to indicate that, contrary to the received wisdom, government-owned banks may not be such a bad thing after all.

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