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Central banks, regulatory capture and banking supervision reform

Author

Listed:
  • Pierre C. Boyer

    (University of Mannheim, Germany. Department of Economics)

  • Jorge Ponce

    (Banco Central del Uruguay)

Abstract

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

Suggested Citation

  • Pierre C. Boyer & Jorge Ponce, 2010. "Central banks, regulatory capture and banking supervision reform," Documentos de trabajo 2010003, Banco Central del Uruguay.
    • Handle: RePEc:bku:doctra:2010003
    as

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    File URL: https://www.bcu.gub.uy/Estadisticas-e-Indicadores/Documentos%20de%20Trabajo/3.2010.pdf
    File Function: First version, 2010
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    References listed on IDEAS

    as
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    Cited by:

    1. Elliott, Douglas J., 2014. "Lessons for Asia from Europe’s History with Banking Integration," ADBI Working Papers 462, Asian Development Bank Institute.
    2. Jorge Ponce & Magdalena Tubio, 2010. "Estabilidad financiera: conceptos básicos," Documentos de trabajo 2010004, Banco Central del Uruguay.
    3. Mr. Marc G Quintyn & Ms. Rosaria Vega Pansini & Donato Masciandaro, 2011. "The Economic Crisis: Did Financial Supervision Matter?," IMF Working Papers 2011/261, International Monetary Fund.

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    More about this item

    Keywords

    Central banks; banking supervision reform; prudential supervision; regulatory capture; institutional organization;
    All these keywords.

    JEL classification:

    • D42 - Microeconomics - - Market Structure, Pricing, and Design - - - Monopoly
    • G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage

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