Regulatory Capture in Banking
Banks will want to influence the bank regulator to favor their interests, and they typically have the means to do so. It is shown that such "regulatory capture" in banking does not imply ineffectual regulation; a "captured" regulator may impose very tight, costly prudential requirements to reduce negative spillovers of risk-taking by weaker banks. In these circumstances, differences in the regulatory regime across jurisdictions may persist because each adapts its regulations to suit its dominant incumbent institutions.
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References listed on IDEAS
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- Robert Marquez & Giovanni Dell'Ariccia, 2001. "Competition Among Regulators," IMF Working Papers 01/73, International Monetary Fund.
- Sinn, Hans-Werner, 2003.
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Munich Reprints in Economics
19615, University of Munich, Department of Economics.
- Hans-Werner Sinn, 2002. "Risktaking, Limited Liability, and the Competition of Bank Regulators," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 59(3), pages 305-, August.
- Hans-Werner Sinn, 2001. "Risk Taking, Limited Liability and the Competition of Bank Regulators," CESifo Working Paper Series 603, CESifo Group Munich.
- Hans-Werner Sinn, 2001. "Risk Taking, Limited Liability and the Competition of Bank Regulators," NBER Working Papers 8669, National Bureau of Economic Research, Inc.
- John A. Weinberg, 2002. "Competition among bank regulators," Economic Quarterly, Federal Reserve Bank of Richmond, issue Fall, pages 19-36.
- Jean-Jacques Laffont & Jean Tirole, 1991. "The Politics of Government Decision-Making: A Theory of Regulatory Capture," The Quarterly Journal of Economics, Oxford University Press, vol. 106(4), pages 1089-1127.
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- Rosen, Richard J, 2003.
" Is Three a Crowd? Competition among Regulators in Banking,"
Journal of Money, Credit and Banking,
Blackwell Publishing, vol. 35(6), pages 967-98, December.
- Richard J. Rosen, 2002. "Is three a crowd? competition among regulators in banking," Proceedings 906, Federal Reserve Bank of Chicago.
- Marc Quintyn & Michael Taylor, 2004. "Should Financial Sector Regulators Be Independent?," IMF Economic Issues 32, International Monetary Fund.
- Randall S. Kroszner & Philip E. Strahan, 2000. "Obstacles to Optimal Policy: The Interplay of Politics and Economics in Shaping Bank Supervision and Regulation Reforms," NBER Working Papers 7582, National Bureau of Economic Research, Inc.
- Paul J. Siegelbaum & Khaled Sherif & Michael Borish & George Clarke, 2002. "Structural Adjustment in the Transition : Case Studies from Albania, Azerbaijan, Kyrgyz Republic, and Moldova," World Bank Publications, The World Bank, number 14052.
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