Incentive Problems in Banking Supervision: The European Case
This paper discusses the incentive conflicts that arise in banking supervision in the EU in a principal-agent framework, where the regulator is the agent and the taxpayers is the principal. The regulatory agent in addition to maintaining financial stability (the objective of the principal) may pursue private interests. Incomplete information, insufficient accountability of the agent and lack of enforceability of compliance result in an incentive problem. A reform of the European supervisory system complemented by strengthening market discipline based on improved disclosure of both the supervisor and the banks may help to solve the European incentive problem.
|Date of creation:||2003|
|Date of revision:|
|Contact details of provider:|| Postal: |
Web page: http://www.zew.de/
More information through EDIRC
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.:
- Holthausen, Cornelia & Rønde, Thomas, 2005.
"Cooperation in International Banking Supervision,"
CEPR Discussion Papers
4990, C.E.P.R. Discussion Papers.
- Holthausen, Cornelia & Rønde, Thomas, 2004. "Cooperation in international banking supervision," Working Paper Series 0316, European Central Bank.
- Cornelia Holthausen & Thomas Rønde, 2003. "Cooperation in International Banking Supervision," CIE Discussion Papers 2004-02, University of Copenhagen. Department of Economics. Centre for Industrial Economics.
- Sharpe, Steven A, 1990.
" Asymmetric Information, Bank Lending, and Implicit Contracts: A Stylized Model of Customer Relationships,"
Journal of Finance,
American Finance Association, vol. 45(4), pages 1069-87, September.
- Steven A. Sharpe, 1989. "Asymmetric information, bank lending, and implicit contracts: a stylized model of customer relationships," Finance and Economics Discussion Series 70, Board of Governors of the Federal Reserve System (U.S.).
- Ronald A. Dye, 1986. "Optimal Monitoring Policies in Agencies," RAND Journal of Economics, The RAND Corporation, vol. 17(3), pages 339-350, Autumn.
- J.G. Rotte & M.P.H. de Vor, 2001. "Report on Financial Management," Research Series Supervision (discontinued) 36, Netherlands Central Bank, Directorate Supervision.
- Campbell, Tim S. & Chan, Yuk-Shee & Marino, Anthony M., 1992.
"An incentive-based theory of bank regulation,"
Journal of Financial Intermediation,
Elsevier, vol. 2(3), pages 255-276, September.
- Giacomo Calzolari & Gyongyi Loranth, 2001. "On the Regulation of Multinational Banks," Rivista di Politica Economica, SIPI Spa, vol. 91(4), pages 297-, April-May.
- Asli Demirgüç-Kunt, 1991. "Principal-agent problems in commercial-bank failure decisions," Working Paper 9106, Federal Reserve Bank of Cleveland.
- anonymous, 1999. "Using subordinated debt as an instrument of market discipline," Staff Studies 172, Board of Governors of the Federal Reserve System (U.S.).
- 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, 2002. "Risktaking, Limited Liability, and the Competition of Bank Regulators," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 59(3), pages 305-, August.
- Sinn, Hans-Werner, 2003. "Risktaking, Limited Liability, and the Competition of Bank Regulators," Munich Reprints in Economics 19615, University of Munich, Department of Economics.
- Hans-Werner Sinn, 2001. "Risk Taking, Limited Liability and the Competition of Bank Regulators," NBER Working Papers 8669, National Bureau of Economic Research, Inc.
- Charles Goodhart, 1996. "An Incentive Structure for Financial Regulation," FMG Special Papers sp88, Financial Markets Group.
- Baron, David P. & Besanko, David, 1984. "Regulation and information in a continuing relationship," Information Economics and Policy, Elsevier, vol. 1(3), pages 267-302.
- Giammarino, R.M. & Sappington, D.E.M., 1990.
"An Incentive Approach to Banking Regulation,"
367, California Davis - Institute of Governmental Affairs.
- Schüler, Martin, 2003. "How Do Banking Supervisors Deal with Europe-wide Systemic Risk?," ZEW Discussion Papers 03-03, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
- Friedrich Heinemann & Martin Schüler, 2004. "A Stiglerian View on Banking Supervision," Public Choice, Springer, vol. 121(1), pages 99-130, October.
- Edward J. Kane, 1997.
"Ethical Foundations of Financial Regulation,"
NBER Working Papers
6020, National Bureau of Economic Research, Inc.
- Arnoud Boot & Silva Dezõelan & Todd Milbourn, 1999. "Regulatory Distortions in a Competitive Financial Services Industry," Journal of Financial Services Research, Springer, vol. 16(2), pages 249-259, December.
- Robert Marquez & Giovanni Dell'Ariccia, 2001. "Competition Among Regulators," IMF Working Papers 01/73, International Monetary Fund.
- Charles A. E. Goodhart, 1996. "An Incentive Structure for Financial Regulation," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 132(IV), pages 637-648, December.
- repec:bla:restud:v:51:y:1984:i:3:p:393-414 is not listed on IDEAS
- Speyer, Bernhard, 2001. "Internationalisation of banking and banking supervision," Research Notes 01-7, Deutsche Bank Research.
- Stéphanie Stolz, 2002. "Banking Supervision in Integrated Financial Markets: Implications for the EU," CESifo Working Paper Series 812, CESifo Group Munich.
- Frederic S. Mishkin, 2001.
"Prudential Supervision: Why Is It Important and What Are the Issues?,"
in: Prudential Supervision: What Works and What Doesn't, pages 1-30
National Bureau of Economic Research, Inc.
- Frederic S. Mishkin, 2000. "Prudential Supervision: Why Is It Important and What are the Issues?," NBER Working Papers 7926, National Bureau of Economic Research, Inc.
- David T. Llewellyn, 2001. "A regulatory regime for financial stability," Working Papers 48, Oesterreichische Nationalbank (Austrian Central Bank).
- Bernheim, B Douglas & Whinston, Michael D, 1986. "Common Agency," Econometrica, Econometric Society, vol. 54(4), pages 923-42, July.
- Edward J. Kane, 1991. "Financial Regulation and Market Forces," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 127(III), pages 325-342, September.
- Boot, Arnoud W A & Thakor, Anjan V, 1993. "Self-Interested Bank Regulation," American Economic Review, American Economic Association, vol. 83(2), pages 206-12, May.
- Kane, Edward J, 1990. " Principal-Agent Problems in S&L Salvage," Journal of Finance, American Finance Association, vol. 45(3), pages 755-64, July.
- Calomiris, Charles W., 1999. "Building an incentive-compatible safety net," Journal of Banking & Finance, Elsevier, vol. 23(10), pages 1499-1519, October.
- Schüler, Martin & Schröder, Michael, 2003. "Systemic Risk in European Banking: Evidence from Bivariate GARCH Models," ZEW Discussion Papers 03-11, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
- Xavier Vives, 2001. "Restructuring Financial Regulation in the European Monetary Union," Journal of Financial Services Research, Springer, vol. 19(1), pages 57-82, February.
- Calomiris, Charles W & Kahn, Charles M, 1991. "The Role of Demandable Debt in Structuring Optimal Banking Arrangements," American Economic Review, American Economic Association, vol. 81(3), pages 497-513, June.
When requesting a correction, please mention this item's handle: RePEc:zbw:zewdip:1492. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (ZBW - German National Library of Economics)
If references are entirely missing, you can add them using this form.