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Financial governance of banking supervision

  • Donato Masciandaro

    ()

    (University of Bocconi - Department of Economics (DEP))

  • María J. Nieto

    ()

    (Banco de España)

  • Henriëtte Prast

    ()

    (de Nederlandsche Bank (Netherlands Central Bank))

This article analyses the economics of financing banking supervision and attempts to respond to two questions: What are the most common financing practices? Can the differences in current financing practices be explained by country specific factors? We perform an empirical analysis that identifies the determinants of the financing structure of banks´ prudential supervision using a sample of 90 banking supervisors (central banks and financial authorities). We conclude that supervisors in central banks are more likely publicly funded, while financial authorities are more likely funded via a levy on the regulated banks. The financing rule is also explained by the structure of the financial systems. Public funding is more likely in bank oriented structures. Finally, the geographical factor is also significant: European bank supervisors are more oriented towards the private funding regime. In general, we do not find evidence of the role of the political factor, the size of the economy, the level of development and the legal tradition.

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File URL: http://www.bde.es/f/webbde/SES/Secciones/Publicaciones/PublicacionesSeriadas/DocumentosTrabajo/07/Fic/dt0725e.pdf
File Function: First version, July 2007
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Paper provided by Banco de Espa�a in its series Banco de Espa�a Working Papers with number 0725.

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Length: 31 pages
Date of creation: Jul 2007
Date of revision:
Handle: RePEc:bde:wpaper:0725
Contact details of provider: Web page: http://www.bde.es/
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