Private sector financing: linear and quadratic effects of domestic public debt on bank credit supply

This paper investigates the impact of domestic public debt on credit supply to the private sector using a panel of 19 banks operating in the Arab Maghreb region over the period 2005-2018. T he results confirm the existence of both linear and quadratic effects of domestic public debt on credit supply to the private sector. T he estimated threshold found to be around 9.77 % of total assets. T he regression results are robust across two alternative specifications excluding public banks and taking into account the impact of the Arab Spring on credit supply to the private sector for different levels of domestic public debt. Submitted: December