The roles of public sector financial institutions have been great issues. We survey previous studies regarding state-owned banks in foreign countries and confirm that there is trend that a number of large state-owned banks are privatized. We empirically examine efficiency and productivity of public sector financial institutions in Japan and then find that efficiency of public sector financial institutions tends to be diverse at the later sample period. This result is consistent with the results of efficiency studies of other financial institutions in Japan. We also find that productivity of public sector financial institutions keeps improving during the sample period but the degree of improvement is different among public sector financial institutions.
