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Is a State Bank a Useful Economic Development Tool in the United States?

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  • Robert S. Chirinko

Abstract

The possibility of creating a state bank has received much recent attention in the United States. In 2021, six states introduced legislation to create a state bank; in 2019, similar legislation was enacted in California for municipal banks. This paper 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.

Suggested Citation

  • Robert S. Chirinko, 2022. "Is a State Bank a Useful Economic Development Tool in the United States?," CESifo Working Paper Series 10098, CESifo.
    • Handle: RePEc:ces:ceswps:_10098
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    More about this item

    Keywords

    state bank; public bank; credit allocation; economic development;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • H70 - Public Economics - - State and Local Government; Intergovernmental Relations - - - General

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