Banking on the principles: Compliance with Basel Core Principles and bank soundness
AbstractThis study finds that banks receive more favorable Moody's financial strength ratings in countries with better compliance with Basel Core Principles related to information provision. The results are robust to controlling for broad indexes of institutional quality, macroeconomic variables, sovereign ratings, and reverse causality. Compliance with other Core Principles does not affect ratings robustly. Measuring bank soundness through Z-scores yields broadly similar results for advanced and emerging markets. Countries aiming to upgrade banking regulation and supervision should consider giving priority to information provision over other elements of the core principles.
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Bibliographic InfoArticle provided by Elsevier in its journal Journal of Financial Intermediation.
Volume (Year): 17 (2008)
Issue (Month): 4 (October)
Contact details of provider:
Web page: http://www.elsevier.com/locate/inca/622875
Bank soundness Regulation and supervision Basel Core Principles;
Other versions of this item:
- Enrica Detragiache & Thierry Tressel & Asli DemirgÃ¼Ã§-Kunt, 2006. "Banking on the Principles: Compliance with Basel Core Principles and Bank Soundness," IMF Working Papers 06/242, International Monetary Fund.
- Demirguc-Kunt, Asli & Detragiache, Enrica & Tressel, Thierry, 2006. "Banking on the principles : compliance with Basel Core Principles and bank soundness," Policy Research Working Paper Series 3954, The World Bank.
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