In the present paper an empirical analysis will point out that government debt as a percentage of GDP has a negative impact (among others) on banking profitability. This impact will be even worse when this debt as a percentage of GDP exceeds a certain critical level. The sample covers during the period 2000–2007 commercial baking sector of Europe and USA. The elaboration of the panel data is made feasible by means of the Eviews software package. Present paper is an extension of author’s previous works.