The model presented in this video is designed to compare different options for the relation between banks and the public sector and different types of subsidies regarding their effects on social welfare. Comparing five options for interlinkage shows that the best choice often are development banks, if they are not allowed to compete with the private banking sector. In this case firms that would not get money from private banks are granted state aid, HENDRIK HAKENES explains, and the private banking sector is not endangered.