Magíster en EconomíaTesis digital no disponible, consulte la versión impresa en Biblioteca de la Universidad Alberto HurtadoPublic sector bank ownership has been a topic of controversy in many countries. Critics of public bank ownership have noted the potential for inefficiency, corruption and other distortions. Supporters of public bank ownership have cited the development of specific sector objectives, as well as their counter-cyclicality to shocks and downturns. This paper analyzes the lending behavior of domestically owned private banks, foreign-owned private banks and public banks during economic cycles in Latin America from 2000-2010. The paper uses country-level data to prove the existence of a countercyclical credit channel provided by public banks during economic downturns.