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Banking risk and regulation: Does one size fit all?

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  • Klomp, Jeroen
  • Haan, Jakob de
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    Abstract

    Using data for more than 200 banks from 21 OECD countries for the period 2002–2008, we examine the impact of bank regulation and supervision on banking risk using quantile regressions. In contrast to most previous research, we find that banking regulation and supervision has an effect on the risks of high-risk banks. However, most measures for bank regulation and supervision do not have a significant effect on low-risk banks. As banking risk and bank regulation and supervision are multi-faceted concepts, our measures for both concepts are constructed using factor analysis.

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    Bibliographic Info

    Article provided by Elsevier in its journal Journal of Banking & Finance.

    Volume (Year): 36 (2012)
    Issue (Month): 12 ()
    Pages: 3197-3212

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    Handle: RePEc:eee:jbfina:v:36:y:2012:i:12:p:3197-3212

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

    Related research

    Keywords: Financial soundness; Bank regulation and supervision; Banking risk; Quantile regression;

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    References

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    Cited by:
    1. Schlüter, Tobias & Sievers, Sönke & Hartmann-Wendels, Thomas, 2012. "How can banks effectively stabilize their retail customers saving behavior? The impact of contractual rewards on saving persistence and cash flow volatility," Annual Conference 2012 (Goettingen): New Approaches and Challenges for the Labor Market of the 21st Century 62057, Verein für Socialpolitik / German Economic Association.
    2. Herrala, Risto, 2014. "Forward-looking reaction to bank regulation," Working Paper Series 1645, European Central Bank.
    3. Paul Cavelaars & Jakob de Haan & Paul Hilbers & Bart Stellinga, 2013. "Challenges for financial sector supervision," DNB Occasional Studies 1106, Netherlands Central Bank, Research Department.
    4. Dragos Ilie & Laura Ungureanu, 2014. "Survey on the Viewpoints of Credit Beneficiaries Qua Consumers in Order to increase Banking Accountability," The AMFITEATRU ECONOMIC journal, Academy of Economic Studies - Bucharest, Romania, vol. 16(35), pages 138, February.

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