Institutions Matter: Financial Supervision Architecture, Central Bank and Path Dependence. General Trends and the South Eastern European Countries
We propose a path dependence approach to analyze the evolution of the financial supervisory architecture, focusing on the institutional role of the central bank, and then apply our framework to describe the institutional settings in a selected sample of countries. The policymaker who decides to maintain or reform the supervisory architecture is influenced by the existing institutional setting in a systematic way: the more the central bank is actually involved in supervision, the less likely a more concentrated supervisory regime will emerge, and vice versa (path dependence effect). We test the path dependence effect describing and evaluating the evolution and the present state of the architecture of six national supervisory regimes in South Eastern Europe (SEE): Albania, Bulgaria, Greece, Romania, Serbia and Turkey. The study of the SEE countries confirms the postulated role of the central bank in the institutional setting. In five cases the high involvement of the central bank in supervision is correlated with a multi–authority regime, while in one case a high degree of financial supervision unification is related with low central bank involvement.
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Lucia Dalla Pellegrina, 2008. "Politicians, central banks, and the shape of financial supervision architectures," Journal of Financial Regulation and Compliance, Emerald Group Publishing, vol. 16(4), pages 290-317, November.
- Masciandaro, Donato, 2007. "Divide et impera: Financial supervision unification and central bank fragmentation effect," European Journal of Political Economy, Elsevier, vol. 23(2), pages 285-315, June.
- 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.
- Taylor, Michael & Fleming, Alex, 1999. "Integrated financial supervision : lessons of Northern European experience," Policy Research Working Paper Series 2223, The World Bank.
- 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.
- Alessandro Gambini & Salim M. Darbar & Marco Arnone, 2007. "Banking Supervision; Quality and Governance," IMF Working Papers 07/82, International Monetary Fund.
- Alicia García Herrero & Pedro del Río López, 2003. "Implications of the design of monetary policy for financial stability," Macroeconomics 0304008, EconWPA.
- 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.
- 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.
- Marc Quintyn & Donato Masciandaro & Frank Lierman & Morten Balling, 2014. "Introduction," Chapters in SUERF Studies, SUERF - The European Money and Finance Forum.