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The Accountability of Financial Sector Supervisors

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Author Info

  • Michael Taylor
  • Marc Quintyn
  • Eva H. G. Hüpkes

Abstract

Policymakers'' uneasiness about granting independence to financial sector regulators stems to a large extent from the lack of familiarity with, and elusiveness of, the concept of accountability. This paper gives operational content to accountability and argues that it is possible to do so in a way that encourages and supports agency independence. The paper first elaborates on the role and purposes of accountability. Second, it shows that the unique features of financial sector supervision point to a more complex system of accountability arrangements than, for instance, the conduct of monetary policy. Finally, the paper discusses specific arrangements that can best secure the objectives of accountability and, thus, independence. Our findings have a wider application than financial sector supervision.

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Bibliographic Info

Paper provided by International Monetary Fund in its series IMF Working Papers with number 05/51.

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Length: 51
Date of creation: 01 Mar 2005
Date of revision:
Handle: RePEc:imf:imfwpa:05/51

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Web page: http://www.imf.org/external/pubind.htm
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Related research

Keywords: Financial sector; Financial stability; Bank supervision; banking; financial system; financial services; financial institutions; banking supervision; financial markets; central banking; deposit insurance; bank of spain; prudential regulation; banking law; financial policies; bank independence; financial market; bank of england; financial regulation; financial statements; financial systems; regulatory objective; bank accounts; banking system; banking publications; bank of korea; banking industry; financial regulations; international standards; banking supervisors; reserve requirements; financial controls; bank management; bank act; derivatives markets; bank insolvency; bank laws; bank officials; bank supervisory authorities; bankers ? association; bank of canada; bank data; banking regulation; regulatory forbearance; systemic banking crisis; financial risk; financial intermediaries; banking crisis; financial sector problems; bank supervisors; state bank; bank for international settlements; bank of japan; connected lending; bank failures; bankers;

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References

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  1. George J. Stigler, 1971. "The Theory of Economic Regulation," Bell Journal of Economics, The RAND Corporation, vol. 2(1), pages 3-21, Spring.
  2. Udaibir S. Das & Marc Quintyn, 2002. "Crisis Prevention and Crisis Management," IMF Working Papers 02/163, International Monetary Fund.
  3. Alesina, Alberto F & Tabellini, Guido, 2004. "Bureaucrats or Politicians?," CEPR Discussion Papers 4252, C.E.P.R. Discussion Papers.
  4. L. Bini-Smaghi, 1998. "The democratic accountability of the European Central Bank," Banca Nazionale del Lavoro Quarterly Review, Banca Nazionale del Lavoro, vol. 51(205), pages 119-143.
  5. Eijffinger, S.C.W. & Hoeberichts, M.M. & Schaling, E., 1998. "A Theory of Central Bank Accountability," Discussion Paper 1998-103, Tilburg University, Center for Economic Research.
  6. Michael Taylor & Marc Quintyn, 2002. "Regulatory and Supervisory Independence and Financial Stability," IMF Working Papers 02/46, International Monetary Fund.
  7. Sander Oosterloo & Jakob de Haan, 2003. "A Survey of Institutional Frameworks for Financial Stability," DNB Occasional Studies 104, Netherlands Central Bank, Research Department.
  8. Persson, Torsten & Tabellini, Guido, 1993. "Designing institutions for monetary stability," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 39(1), pages 53-84, December.
  9. L. Bini-Smaghi, 1998. "The democratic accountability of the European Central Bank," BNL Quarterly Review, Banca Nazionale del Lavoro, vol. 51(205), pages 119-143.
  10. Udaibir S. Das & Marc Quintyn & Kina Chenard, 2004. "Does Regulatory Governance Matter for Financial System Stability? An Empirical Analysis," IMF Working Papers 04/89, International Monetary Fund.
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Citations

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Cited by:
  1. Masciandaro, D. & Nieto, M. & Prast, H.M., 2007. "Financial Governance of Banking Supervision," Open Access publications from Tilburg University urn:nbn:nl:ui:12-381469, Tilburg University.
  2. Martin Èihák & Richard Podpiera, 2006. "Is One Watchdog Better than Three? International Experience with Integrated Financial-Sector Supervision (in English)," Czech Journal of Economics and Finance (Finance a uver), Charles University Prague, Faculty of Social Sciences, vol. 56(3-4), pages 102-126, March.
  3. Masciandaro, Donato & Pansini, Rosaria Vega & Quintyn, Marc, 2013. "The economic crisis: Did supervision architecture and governance matter?," Journal of Financial Stability, Elsevier, vol. 9(4), pages 578-596.
  4. Delis, Manthos D & Staikouras, Panagiotis, 2009. "On-site audits, sanctions, and bank risk-taking: An empirical overture towards a novel regulatory and supervisory philosophy," MPRA Paper 16836, University Library of Munich, Germany.
  5. Robert Lavigne & Philipp Maier & Eric Santor, 2009. "Renewing IMF surveillance: Transparency, accountability, and independence," The Review of International Organizations, Springer, vol. 4(1), pages 29-46, March.
  6. International Monetary Fund, 2009. "A European Mandate for Financial Sector Supervisors in the EU," IMF Working Papers 09/5, International Monetary Fund.
  7. D'Hulster, Katia, 2011. "Cross border banking supervision : incentive conflicts in supervisory information sharing between home and host supervisors," Policy Research Working Paper Series 5871, The World Bank.
  8. Ojo, Marianne, 2011. "The need for revised resolution regimes and supervisory arrangements," MPRA Paper 33674, University Library of Munich, Germany.
  9. Alessandro Gambini & Salim M. Darbar & Marco Arnone, 2007. "Banking Supervision," IMF Working Papers 07/82, International Monetary Fund.
  10. Ojo, Marianne, 2009. "Central bank’s role and involvement in bank regulation: Lender of last resort arrangements and the Special Resolution Regime (SRR)," MPRA Paper 33670, University Library of Munich, Germany, revised Sep 2011.
  11. Laurence Scialom, 2007. "Pour une politique d'actions correctives précoces dans l'Union européenne : les carences institutionnelles et légales," Revue d'Économie Financière, Programme National Persée, vol. 89(3), pages 111-121.
  12. Marc Quintyn & Donato Masciandaro & María Nieto, 2009. "Will they Sing the Same Tune? Measuring Convergence in the New European System of Financial Supervisors," IMF Working Papers 09/142, International Monetary Fund.
  13. Granlund, Peik, 2008. "Regulatory choices in global financial markets – restoring the role of aggregate utility in the shaping of market supervision," Research Discussion Papers 1/2008, Bank of Finland.
  14. Udaibir S. Das & Marc Quintyn & Kina Chenard, 2004. "Does Regulatory Governance Matter for Financial System Stability? An Empirical Analysis," IMF Working Papers 04/89, International Monetary Fund.

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