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Banking risk and regulation: Does one size fit all?


  • Jeroen Klomp
  • Jakob de Haan


Using data for more than 200 banks from 21 OECD countries for the period 2002 to 2008, we examine the impact of bank regulation and supervision on banking risk using quantile regressions. In contrast to most previous research, we find that banking regulation and supervision has an effect on the risks of high-risk banks. However, most measures for bank regulation and supervision do not have a significant effect on low-risk banks. As banking risk and bank regulation and supervision are multifaceted concepts, our measures for both concepts are constructed using factor analysis.

Suggested Citation

  • Jeroen Klomp & Jakob de Haan, 2011. "Banking risk and regulation: Does one size fit all?," DNB Working Papers 323, Netherlands Central Bank, Research Department.
  • Handle: RePEc:dnb:dnbwpp:323

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    Cited by:

    1. Lee, Tung-Hao & Chih, Shu-Hwa, 2013. "Does financial regulation affect the profit efficiency and risk of banks? Evidence from China's commercial banks," The North American Journal of Economics and Finance, Elsevier, vol. 26(C), pages 705-724.
    2. Williams, Barry, 2014. "Bank risk and national governance in Asia," Journal of Banking & Finance, Elsevier, vol. 49(C), pages 10-26.
    3. repec:hal:journl:dumas-00879876 is not listed on IDEAS
    4. Triki, Thouraya & Kouki, Imen & Dhaou, Mouna Ben & Calice, Pietro, 2017. "Bank regulation and efficiency: What works for Africa?," Research in International Business and Finance, Elsevier, vol. 39(PA), pages 183-205.

    More about this item


    Financial soundness; Bank regulation and supervision; Banking risk; Quantile regression;

    JEL classification:

    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • G2 - Financial Economics - - Financial Institutions and Services

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