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Financial supervision regimes and bank efficiency: International evidence

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  • Gaganis, Chrysovalantis
  • Pasiouras, Fotios

Abstract

There exists a lively debate as for the appropriate architecture of the financial supervision regime, with a long list of theoretical advantages and disadvantages associated with each one of its key dimensions. The present study investigates whether and how bank profit efficiency is influenced by the central bank’s involvement in financial supervision, the unification of financial authorities, and the independence of the central bank. The results show that efficiency decreases as the number of the financial sectors that are supervised by the central bank increases. Additionally, banks operating in countries with greater unification of supervisory authorities are less profit efficient. Finally, central bank independence has a negative impact on bank profit efficiency.

Suggested Citation

  • Gaganis, Chrysovalantis & Pasiouras, Fotios, 2013. "Financial supervision regimes and bank efficiency: International evidence," Journal of Banking & Finance, Elsevier, vol. 37(12), pages 5463-5475.
    • Handle: RePEc:eee:jbfina:v:37:y:2013:i:12:p:5463-5475
    DOI: 10.1016/j.jbankfin.2013.04.026
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    More about this item

    Keywords

    Central bank; Efficiency; Independence; Supervision; Unification;
    All these keywords.

    JEL classification:

    • 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

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