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E Pluribus Unum? Authorities' Design in Financial Supervision: Trends and Determinants


  • Donato Masciandaro


This paper presents an analysis of recent trends and determinants in the architectures of financial supervision, focused on the authorities design. We propose a path dependence approach to study the single authority versus multi-authority dilemma, considering the level of financial supervision consolidation as the dependent variable. In particular, in a movement towards full consolidation in supervision, one can think of two sharp alternatives: a monopolist central bank or a pure single financial authority. Given that the degree of supervision consolidation seems to be inversely correlated with central bank involvement in supervision itself, the paper sheds light on the possible explanation of this trade-off. The trade off is tested using Probit techniques with a sample of 68 countries. Copyright Springer Science + Business Media, Inc. 2006

Suggested Citation

  • Donato Masciandaro, 2006. "E Pluribus Unum? Authorities' Design in Financial Supervision: Trends and Determinants," Open Economies Review, Springer, vol. 17(1), pages 73-102, January.
  • Handle: RePEc:kap:openec:v:17:y:2006:i:1:p:73-102
    DOI: 10.1007/s11079-006-4739-7

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    References listed on IDEAS

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    Cited by:

    1. Donato Masciandaro & Marc Quintyn, 2010. "Institutions Matter: Financial Supervision Architecture, Central Bank and Path-Dependence. General Trends and the South Eastern European Countries," South-Eastern Europe Journal of Economics, Association of Economic Universities of South and Eastern Europe and the Black Sea Region, vol. 8(1), pages 7-53.
    2. Masciandaro, Donato & Quintyn, Marc & Taylor, Michael W., 2008. "Inside and outside the central bank: Independence and accountability in financial supervision: Trends and determinants," European Journal of Political Economy, Elsevier, vol. 24(4), pages 833-848, December.
    3. Masciandaro, Donato & Volpicella, Alessio, 2016. "Macro prudential governance and central banks: Facts and drivers," Journal of International Money and Finance, Elsevier, vol. 61(C), pages 101-119.
    4. Donato Masciandaro, 2012. "Determinants of Financial Supervision Regimes: Markets, Institutions, Politics, Law or Geography?," Chapters,in: Research Handbook on International Financial Regulation, chapter 14 Edward Elgar Publishing.
    5. Cihák, Martin & Podpiera, Richard, 2008. "Integrated financial supervision: Which model?," The North American Journal of Economics and Finance, Elsevier, vol. 19(2), pages 135-152, August.
    6. Masciandaro, Donato & Quintyn, Marc, 2008. "Helping hand or grabbing hand?: Politicians, supervision regime, financial structure and market view," The North American Journal of Economics and Finance, Elsevier, vol. 19(2), pages 153-173, August.
    7. Melecky, Martin & Podpiera, Anca Maria, 2012. "Institutional structures of financial sector supervision, their drivers and emerging benchmark models," MPRA Paper 37059, University Library of Munich, Germany.
    8. Lucia Dalla Pellegrina & Donato Masciandaro & Rosaria Vega Pansini, 2011. "New Advantages of Tying One’s Hands: Banking Supervision, Monetary Policy and Central Bank Independence," Chapters,in: Handbook of Central Banking, Financial Regulation and Supervision, chapter 8 Edward Elgar Publishing.
    9. Masciandaro, Donato, 2009. "Politicians and financial supervision unification outside the central bank: Why do they do it?," Journal of Financial Stability, Elsevier, vol. 5(2), pages 124-146, June.
    10. Donato Masciandaro & Maria J. Nieto & Marc Quintyn, 2011. "Will They Sing the Same Tune? Measuring Convergence in the New European System of Financial Supervisors," Chapters,in: Handbook of Central Banking, Financial Regulation and Supervision, chapter 17 Edward Elgar Publishing.
    11. Donato Masciandaro & Marc Quintyn, 2011. "Regulating the Regulators: The Changing Face of Financial Supervision Architectures Before and After the Financial Crisis," Chapters,in: Handbook of Central Banking, Financial Regulation and Supervision, chapter 16 Edward Elgar Publishing.
    12. Donato Masciandaro & Marc Quintyn, 2013. "The Evolution of Financial Supervision: the Continuing Search for the Holy Grail," SUERF 50th Anniversary Volume Chapters, SUERF - The European Money and Finance Forum.
    13. Ivan Diaz-Rainey & John Ashton & Maz Yap & Murat Genc & Rosalind Whiting, 2015. "The determinants of regulatory responses to risks from financial innovation: Survey evidence from G20," Working Papers 15001, Bangor Business School, Prifysgol Bangor University (Cymru / Wales).
    14. Donato Masciandaro & Marc G Quintyn & Michael W Taylor, 2008. "Financial Supervisory Independence and Accountability–Exploring the Determinants," IMF Working Papers 08/147, International Monetary Fund.
    15. Dalla Pellegrina, L. & Masciandaro, D. & Pansini, R.V., 2013. "The central banker as prudential supervisor: Does independence matter?," Journal of Financial Stability, Elsevier, vol. 9(3), pages 415-427.
    16. L. Dalla Pellegrina & D. Masciandaro & R. Pansini, 2014. "Do exchange rate regimes affect the role of central banks as banking supervisors?," European Journal of Law and Economics, Springer, vol. 38(2), pages 279-315, October.
    17. Melecky, Martin & Podpiera, Anca Maria, 2013. "Institutional structures of financial sector supervision, their drivers and historical benchmarks," Journal of Financial Stability, Elsevier, vol. 9(3), pages 428-444.
    18. Donato Masciandaro & Davide Romelli, 2015. "Central Bankers as Supervisors: Do Crises Matter?," BAFFI CAREFIN Working Papers 1504, BAFFI CAREFIN, Centre for Applied Research on International Markets Banking Finance and Regulation, Universita' Bocconi, Milano, Italy.


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