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Regulatory capture and banking supervision reform

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  • Boyer, Pierre C.
  • Ponce, Jorge

Abstract

We analyze whether banking supervision responsibilities should be concentrated in the hands of a single supervisor. We find that splitting supervisory powers among different supervisors is a superior arrangement in terms of social welfare to concentrating them in a single supervisor when the capture of supervisors by bankers is a concern. This result has implications for the design of banking supervisory architecture and informs current reform efforts in this field.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Financial Stability.

Volume (Year): 8 (2012)
Issue (Month): 3 ()
Pages: 206-217

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Handle: RePEc:eee:finsta:v:8:y:2012:i:3:p:206-217

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Web page: http://www.elsevier.com/locate/jfstabil

Related research

Keywords: Prudential supervision; Regulatory capture; Banking supervision reform; Financial supervision architecture;

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References

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Citations

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Cited by:
  1. Arnone, Marco & Romelli, Davide, 2013. "Dynamic central bank independence indices and inflation rate: A new empirical exploration," Journal of Financial Stability, Elsevier, vol. 9(3), pages 385-398.
  2. Mario Sarcinelli, 2013. "L'unione bancaria europea e la stabilizzazione dell'Eurozona," Moneta e Credito, Economia civile, vol. 66(261), pages 7-42.
  3. Elliott, Douglas J., 2014. "Lessons for Asia from Europe’s History with Banking Integration," ADBI Working Papers 462, Asian Development Bank Institute.
  4. Marc Quintyn & Rosaria Vega Pansini & Donato Masciandaro, 2011. "The Economic Crisis," IMF Working Papers 11/261, International Monetary Fund.
  5. Mario Sarcinelli, 2013. "The European Banking Union: Will It Be a True Union without Risk Sharing?," PSL Quarterly Review, Economia civile, vol. 66(265), pages 137-167.
  6. Agur, Itai, 2013. "Multiple bank regulators and risk taking," Journal of Financial Stability, Elsevier, vol. 9(3), pages 259-268.
  7. Dalla Pellegrina, L. & Masciandaro, D. & Pansini, R.V., 2013. "The central banker as prudential supervisor: Does independence matter?," Journal of Financial Stability, Elsevier, vol. 9(3), pages 415-427.
  8. Donato Masciandaro & Marc Quintyn, 2013. "The Evolution of Financial Supervision: the Continuing Search for the Holy Grail," SUERF 50th Anniversary Volume Chapters, SUERF - The European Money and Finance Forum.
  9. Hakenes, Hendrik & Schnabel, Isabel, 2013. "Regulatory Capture by Sophistication," Annual Conference 2013 (Duesseldorf): Competition Policy and Regulation in a Global Economic Order 79991, Verein für Socialpolitik / German Economic Association.

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