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Central banks, regulatory capture and banking supervision reform

Listed author(s):
  • Pierre C. Boyer

    ()

    (University of Mannheim, Germany. Department of Economics)

  • Jorge Ponce

    ()

    (Banco Central del Uruguay)

Should central banks be in charge of micro-prudential as well as of macro-prudential supervision? This paper uses a formal model to analyze that question, and thereby informs the current reform efforts on the fields of banking supervision. Our main finding is that, while there are good reasons for central banks to conduct macroprudential supervision, it is socially optimal that another supervisor conducts micro-prudential supervision when supervisors’ capture by bankers is a concern

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File URL: http://www.bcu.gub.uy/Estadisticas-e-Indicadores/Documentos%20de%20Trabajo/3.2010.pdf
File Function: First version, 2010
Download Restriction: no

Paper provided by Banco Central del Uruguay in its series Documentos de trabajo with number 2010003.

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Length: 33 pages
Date of creation: 25 Sep 2010
Handle: RePEc:bku:doctra:2010003
Contact details of provider: Postal:
Biblioteca Especializada. Banco Central del Uruguay. Diagonal Fabini 777, Montevideo-Uruguay. CP 11100

Phone: +598 1967
Web page: http://www.bcu.gub.uy
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  6. repec:hrv:faseco:30747190 is not listed on IDEAS
  7. Gabillon, Emmanuelle & Martimort, David, 2004. "The benefits of central bank's political independence," European Economic Review, Elsevier, vol. 48(2), pages 353-378, April.
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  18. Marc Quintyn & Michael W. Taylor, 2003. "Regulatory and Supervisory Independence and Financial Stability," CESifo Economic Studies, CESifo, vol. 49(2), pages 259-294.
  19. Goodhart, Charles & Schoenmaker, Dirk, 1995. "Should the Functions of Monetary Policy and Banking Supervision Be Separated?," Oxford Economic Papers, Oxford University Press, vol. 47(4), pages 539-560, October.
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