Cooperation among EU Banking Supervisory Authorities : A Game Model

The aim of the paper is carrying out of survey for cooperation among banking supervisors based on the model of cooperative games. The initial measures of supervisors are aimed at rescuing the banking assets in their territory and to reduce losses to local taxpayers. The new reality demands these measures also to take into account the effects on other countries, and the need for cooperation among banking supervisors through ex-ante engagements for sharing ex-post costs.The results of paper show that the original measures to reduce the effects of global crisis have triggered short-term stabilization of the banking system at predominance of national interests. Using game theory for cooperation among banking supervisors leads to optimization of outcome for all countries participating in the ex-ante engagements. From the concrete case for a Bulgarian bank, part of an EU banking group, we have concluded that cooperation among more than two supervisors is recommended depending on the structure of the banking group