Bigger may sometimes be better in banking, but ownership matters too. Whatever the size of a bank, it will usually perform worse in government hands, because governments are generally less motivated than private shareholders are, and less good than market forces are at collecting and digesting information. Besides, they have lots of other things to do. There are bound to be conflicts of interest and lapses of concentration. The bigger the state-owned bank, the bigger the mistakes it is liable to make.
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