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Banking risk and regulation: Does one size fit all?

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  • Jeroen Klomp
  • Jakob de Haan

Abstract

Using data for more than 200 banks from 21 OECD countries for the period 2002 to 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 multifaceted concepts, our measures for both concepts are constructed using factor analysis.

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Bibliographic Info

Paper provided by Netherlands Central Bank, Research Department in its series DNB Working Papers with number 323.

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Date of creation: Nov 2011
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Handle: RePEc:dnb:dnbwpp:323

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

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Cited by:
  1. Lee, Tung-Hao & Chih, Shu-Hwa, 2013. "Does financial regulation affect the profit efficiency and risk of banks? Evidence from China's commercial banks," The North American Journal of Economics and Finance, Elsevier, vol. 26(C), pages 705-724.
  2. Lacina Diarra, 2013. "Analyse de l'impact de la régulation sur la prise de risque par les banques," Post-Print dumas-00879876, HAL.

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