Basel Core Principles and Bank Risk; Does Compliance Matter?
This paper studies whether compliance with the Basel Core Principles for effective banking supervision (BCPs) is associated with bank soundness. Using data for over 3,000 banks in 86countries, we find that neither the overall index of BCP compliance nor its individual components are robustly associated with bank risk measured by Z-scores. We also fail to find a relationship between BCP compliance and systemic risk measured by a system-wide Zscore.
|Date of creation:||01 Mar 2010|
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- Demirguc-Kunt, Asli & Detragiache, Enrica & Tressel, Thierry, 2006.
"Banking on the principles : compliance with Basel Core Principles and bank soundness,"
Policy Research Working Paper Series
3954, The World Bank.
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- Kashyap, Anil K. & Rajan, Raghuram G. & Stein, Jeremy C., 2008. "Rethinking capital regulation," Proceedings - Economic Policy Symposium - Jackson Hole, Federal Reserve Bank of Kansas City, pages 431-471.
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