With the Great Crisis of 2008-2009 we have witnessed a relevant episode of macroeconomic vulnerability affecting many countries. To what extent such vulnerability has depended upon the design of light touch (LT) banking regulation? And to what extent other institutional factors, different from...

We empirically investigate whether central bank independence (CBI) and the monetary policy setting can jointly influence the likelihood that policymakers assign banking supervision to central banks. We find that, conditional on the government being a benevolent one, higher central bank...

We investigate the reasons that induce policymakers to assign banking supervision to central banks rather than involving authorities outside the banking sector. On the one hand, empirical results provide evidence that policymakers prefer that, conditional on several known features affecting...