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Who can better monitor a bank than another bank? Mechanisms of discipline in the Mexican interbank market ||¿Quién mejor que un banco para monitorear otro banco? Mecanismos de disciplina en el mercado interbancario mexicano

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  • Tovar-García, Edgar Demetrio

    (Higher School of Economics National Research University (Russia))

Abstract

Basel III proposes market discipline (banking disclosure requirements) as a key instrument to achieve soundness in the banking system. Consequently, it is necessary to test the presence of responses to bank risk on the part of the economic agents. This article empirically studies the mechanisms of market discipline (price, quantity, and maturity) in the interbank market: whether higher risk banks have to pay higher interest rate, and have less access to credit in the interbank market, especially for long maturity borrowing. Theoretically, bankers are well equipped to monitor other banks, but the interbank market also is a channel for contagion. Using a sample of 37 Mexican banks, from December 2008 to September 2012, and a dynamic panel model (SYS GMM estimator), I did not find evidence for discipline induced by peers.|| Basilea III propone disciplina de mercado (requisitos de revelación de información bancaria) como herramienta clave para alcanzar un sistema bancario sólido. Consecuentemente, es necesario vericar la presencia de reacciones al riesgo bancario por parte de los agentes económicos. Este artículo empíricamente estudia los mecanismos de disciplina de mercado (precio,cantidad y vencimiento) en el mercado interbancario: si los bancos más riesgosos tienen que pagar tasas de interés más altas y tienen menor acceso al crédito interbancario, especialmente de préstamos con vencimiento de largo plazo. Teóricamente, los banqueros están bien equipados para monitorear otros bancos, pero el mercado interbancario también es un canal para contagio. Usando una muestra de 37 bancos mexicanos, de diciembre de 2008 a septiembre de 2012, y un modelo dinámico con datos de panel (el estimador SYS GMM), no se encontró evidencia a favor de la disciplina inducida por pares bancarios.

Suggested Citation

  • Tovar-García, Edgar Demetrio, 2016. "Who can better monitor a bank than another bank? Mechanisms of discipline in the Mexican interbank market ||¿Quién mejor que un banco para monitorear otro banco? Mecanismos de disciplina en el mercado," Revista de Métodos Cuantitativos para la Economía y la Empresa = Journal of Quantitative Methods for Economics and Business Administration, Universidad Pablo de Olavide, Department of Quantitative Methods for Economics and Business Administration, vol. 21(1), pages 205-229, June.
    • Handle: RePEc:pab:rmcpee:v:21:y:2016:i:1:p:205-229
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    References listed on IDEAS

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    Cited by:

    1. Edgar Demetrio Tovar-García, 2017. "Disciplina de mercado en el sistema bancariocentroamericano," Contaduría y Administración, Accounting and Management, vol. 62(5), pages 21-22, Diciembre.
    2. Marília Pinheiro Ohlson & Gerlando Augusto Sampaio Franco de Lima & Tony Takeda, 2021. "Deposit insurance and brokerage firms: impacts on the market discipline of the Brazilian banking industry," Working Papers Series 542, Central Bank of Brazil, Research Department.
    3. Edgar Demetrio Tovar-García, 2017. "Market discipline in the Central American bankingsystem," Contaduría y Administración, Accounting and Management, vol. 62(5), pages 23-24, Diciembre.

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    More about this item

    Keywords

    market discipline; interbank market; bank risk; contagion; Mexico; disciplina de mercado; mercado interbancario; riesgo bancario; contagio;
    All these keywords.

    JEL classification:

    • E59 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Other
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G39 - Financial Economics - - Corporate Finance and Governance - - - Other

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