Basel core principles and bank soundness : does compliance matter ?
AbstractThis paper studies whether compliance with the Basel Core Principles for effective banking supervision is associated with bank soundness. Using data for more than 3,000 banks in 86 countries, the authors find that neither the overall index of compliance with the Basel Core Principles nor the individual components of the index are robustly associated with bank risk measured by Z-scores. The results of the analysis cast doubt on the usefulness of the Basel Core Principles in ensuring bank soundness.
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Bibliographic InfoPaper provided by The World Bank in its series Policy Research Working Paper Series with number 5129.
Date of creation: 01 Nov 2009
Date of revision:
Banks&Banking Reform; Public Sector Corruption&Anticorruption Measures; Financial Intermediation; Debt Markets; Hazard Risk Management;
Other versions of this item:
- Demirgüç-Kunt, Asli & Detragiache, Enrica, 2011. "Basel Core Principles and bank soundness: Does compliance matter?," Journal of Financial Stability, Elsevier, vol. 7(4), pages 179-190, December.
- NEP-ALL-2009-11-27 (All new papers)
- NEP-BAN-2009-11-27 (Banking)
- NEP-CFN-2009-11-27 (Corporate Finance)
- NEP-REG-2009-11-27 (Regulation)
- NEP-RMG-2009-11-27 (Risk Management)
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