State ownership in banking : theory applied to a case study of the Norwegian government's ownership in DnB NOR

Abstract

State ownership in banking has received considerable coverage in the academic literature. However, there are very few recognised case studies of state ownership of banks in developed countries. The motivation for this thesis is thus to investigate the properties of state ownership in the context of a highly developed country Theoretical and empirical work suggest that the success of government ownership in banks depends on the quality of government and financial institutions, independent regulation, the rationale for ownership, and recognition of good corporate governance standards. Apart from some minor issues, the case study of the Norwegian government's bank ownership supports this view. Institutions are well developed, the rationale for ownership is moderate, and the government applies corporate governance standards that are broadly agreed upon. The result is that the government is rather successful in achieving its goals, and avoiding most of the pitfalls normally associated with government ownership.