Regulatory capture and banking supervision reform

Regulatory capture and banking supervision reform

We analyze whether banking supervision responsibilities should be concentrated in the hands of a single supervisor. We find that splitting supervisory powers among different supervisors is a superior arrangement in terms of social welfare to concentrating them in a single supervisor when the capture of supervisors by bankers is a concern. This result has implications for the design of banking supervisory architecture and informs current reform efforts in this field.

Pierre C. Boyer and Jorge Ponce

Journal of Financial Stability

September 2012

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By |2018-01-01T00:00:00-08:00January 1st, 2018|Financial Regulation, Political Economy, Reference, Reforms|