The integration of financial markets and growth - the role of banking regulation and supervision

The study is aimed at investigating the role of banking regulation and supervision in the relation between financial integration and long term growth by means of dynamic panel model estimation. The study covers a sample of 69 countries during the period 1975-2007.The study gives some new results on the impact of banking regulation on the investigated relation. Banking regulation can turn the negative impact of financial integration on growth into positive. Moreover the results indicate that the respective banking regulatory features play various roles in shaping the effects of financial integration on growth.