The Costs of Supervisory Fragmentation in Europe
Financial markets in Europe become more and more integrated. The persisting fragmentation of financial supervision, however, constitutes a lasting obstacle to integration. The aim of this paper is to assess these costs of supervisory fragmentation. We find clear evidence for the existence of economies of scale in banking supervision. An increase in supervisory output by one percent causes institutional supervisory cost to rise by only some 0.5 percent. Based on these estimation results we predict institutional cost saving of around 15 percent in a plausible simulation scenario representing a cost-efficient European supervisory framework.
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- Charles Goodhart & Dirk Schoenmaker & Paolo Dasgupta, 2002.
"The Skill Profile of Central Bankers and Supervisors,"
Review of Finance,
European Finance Association, vol. 6(3), pages 397-427.
- Charles Goodhart & Dirk Schoenmaker & Paolo Dasgupta, 2001. "The skill profile of central bankers and supervisors," LSE Research Online Documents on Economics 25052, London School of Economics and Political Science, LSE Library.
- Dirk Schoenmaker & Paolo Dasgupta & Charles Goodhart, 2001. "The Skill Profile of Central Bankers and Supervisors," FMG Discussion Papers dp377, Financial Markets Group.
- Gual, Jordi, 2004. "The Integration of EU Banking Markets," CEPR Discussion Papers 4212, C.E.P.R. Discussion Papers.
- Gregory E. Elliehausen, 1998. "The cost of banking regulation: a review of the evidence," Staff Studies 171, Board of Governors of the Federal Reserve System (U.S.). Full references (including those not matched with items on IDEAS)
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