Monitoring the Supervisors : Optimal Regulatory Architecture in a Banking Union

I study the optimal architecture of bank supervision in a federal system. A central supervisor gets information about a bank, for instance through stress-testing, and decides whether an on-site examination should be performed by a local or a central authority. Local supervisors have lower inspection costs, but do not internalize cross-border externalities. The optimal degree of centralization depends on the severity of these externalities, the opacity of the supervised bank and the specificity of its assets. The market reacts to the chosen architecture, so that a centralized supervision endogenously increases market integration and cross-border externalities, strengthening the need for centralized supervision. The economy can be trapped in an equilibrium with low supervision and integration, while a forward-looking design of the supervisory architecture would coordinate economic agents on a superior equilibrium

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Year of publication:	2014
Authors:	Colliard, Jean-Edouard
Publisher:	[2014]: [S.l.] : SSRN
Subject:	Bankenaufsicht \| Banking supervision \| Bankenregulierung \| Bank regulation \| Finanzkrise \| Financial crisis \| Regulierung \| Regulation

Extent:	1 Online-Ressource (41 p)
Type of publication:	Book / Working Paper
Language:	English
Notes:	Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments April 17, 2014 erstellt
Other identifiers:	10.2139/ssrn.2274164 [DOI]
Classification:	D53 - Financial Markets ; G21 - Banks; Other Depository Institutions; Mortgages ; G28 - Government Policy and Regulation ; G33 - Bankruptcy; Liquidation ; G38 - Government Policy and Regulation ; L51 - Economics of Regulation
Source:	ECONIS - Online Catalogue of the ZBW

Persistent link: https://ebvufind01.dmz1.zbw.eu/10013063800