The dependence of the financial system on central bank and government support

1 March 2010

How much does the banking sector depend on public support? Utilisation of many support facilities has declined, due mainly to a fall in demand. Supply factors play a smaller, but not insignificant role, as governments and central banks have tightened the conditions on which certain support measures are available or have phased them out entirely. However, not all financial institutions have reduced their use of support facilities. Weaker banks especially continue to depend on public support.

JEL classification: E5, G2