While public financial institutions (such as public development banks) are commonly
associated with developing countries, in fact they are prevalent in the developed
world as well. We study a sample of public financial institutions in industrialized
countries and identify dominant trends in their organization and oversight. While
practices in developed countries may be a useful reference point, a more nuanced
approach, accounting for the disparity of institutional environment, regulatory capacity,
and government accountability and effectiveness, may be required in developing countries.
Further investment in the accumulation of evidence and formulation of best practices
in the organization and oversight of public financial institutions seems warranted
and necessary. This paper was prepared while Mr. Ratnovski was working in the Financial
Supervision and Regulation Division during January-April 2006. The authors are grateful
to Jonathan Fiechter, David Marston, and participants of an MCM seminar in April
2006 for their helpful comments.