IDEAS home Printed from https://ideas.repec.org/a/eee/riibaf/v66y2023ics027553192300185x.html
   My bibliography  Save this article

How to measure banking regulation and supervision

Author

Listed:
  • Pereira Pedro, Cristina
  • Ramalho, Joaquim J.S.
  • Silva, Jacinto Vidigal da

Abstract

This paper uses data from 141 countries to identify the variables that best characterize worldwide banking regulation and supervision practices. We apply a nonlinear principal components analysis with optimal variable transformation to deal with the variables’ mixed measurement levels and reduce data dimensionality. The robustness of the results is tested for different subsamples. The findings indicate that deposit insurance, liquidity, diversification requirements, complementary banking activities, and market discipline are the most reliable indicators to measure regulation. In contrast, resolution activities, the mandate of the head of the supervisory agency, and the report of prudential regulation infractions assume the same role for banking supervision. Capital requirements and ownership are of minor relevance and are sensitive to a country’s development level. China and Germany display the most distinct regulation practices, while China and the UK adopt the most stringent policies regarding supervision.

Suggested Citation

  • Pereira Pedro, Cristina & Ramalho, Joaquim J.S. & Silva, Jacinto Vidigal da, 2023. "How to measure banking regulation and supervision," Research in International Business and Finance, Elsevier, vol. 66(C).
    • Handle: RePEc:eee:riibaf:v:66:y:2023:i:c:s027553192300185x
    DOI: 10.1016/j.ribaf.2023.102059
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S027553192300185X
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.ribaf.2023.102059?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    More about this item

    Keywords

    Banking regulation; Banking supervision; Nonlinear principal components analysis;
    All these keywords.

    JEL classification:

    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:riibaf:v:66:y:2023:i:c:s027553192300185x. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/ribaf .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.