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Supervisory Incentives in a Banking Union

Supervisory Incentives in a Banking Union PDF Author: Elena Carletti
Publisher: International Monetary Fund
ISBN: 1475537638
Category : Business & Economics
Languages : en
Pages : 50

Book Description
We explore the behavior of supervisors when a centralized agency has full power over all decisions regarding banks, but relies on local supervisors to collect the information necessary to act. This institutional design entails a principal-agent problem between the central and local supervisors if their objective functions differ. Information collection may be inferior to that under fully independent local supervisors or under centralized information collection. And this may increase risk-taking by regulated banks. Yet, a “tougher” central supervisor may increase regulatory standards. Thus, the net effect of centralization on bank risk taking depends on the balance of these two effects.

Supervisory Incentives in a Banking Union

Supervisory Incentives in a Banking Union PDF Author: Elena Carletti
Publisher: International Monetary Fund
ISBN: 1475537638
Category : Business & Economics
Languages : en
Pages : 50

Book Description
We explore the behavior of supervisors when a centralized agency has full power over all decisions regarding banks, but relies on local supervisors to collect the information necessary to act. This institutional design entails a principal-agent problem between the central and local supervisors if their objective functions differ. Information collection may be inferior to that under fully independent local supervisors or under centralized information collection. And this may increase risk-taking by regulated banks. Yet, a “tougher” central supervisor may increase regulatory standards. Thus, the net effect of centralization on bank risk taking depends on the balance of these two effects.

Supervisory Incentives in a Banking Union

Supervisory Incentives in a Banking Union PDF Author: Elena Carletti
Publisher: International Monetary Fund
ISBN: 1475536755
Category : Business & Economics
Languages : en
Pages : 50

Book Description
We explore the behavior of supervisors when a centralized agency has full power over all decisions regarding banks, but relies on local supervisors to collect the information necessary to act. This institutional design entails a principal-agent problem between the central and local supervisors if their objective functions differ. Information collection may be inferior to that under fully independent local supervisors or under centralized information collection. And this may increase risk-taking by regulated banks. Yet, a “tougher” central supervisor may increase regulatory standards. Thus, the net effect of centralization on bank risk taking depends on the balance of these two effects.

A Banking Union for the Euro Area

A Banking Union for the Euro Area PDF Author: Rishi Goyal
Publisher: International Monetary Fund
ISBN: 1475569823
Category : Business & Economics
Languages : en
Pages : 31

Book Description
The SDN elaborates the case for, and the design of, a banking union for the euro area. It discusses the benefits and costs of a banking union, presents a steady state view of the banking union, elaborates difficult transition issues, and briefly discusses broader EU issues. As such, it assesses current plans and provides advice. It is accompanied by three background technical notes that analyze in depth the various elements of the banking union: a single supervisory framework; a single resolution and common safety net; and urgent issues related to repair of weak banks in Europe.

Banking Union for Europe

Banking Union for Europe PDF Author: Thorsten Beck
Publisher:
ISBN: 9781907142574
Category : Business & Economics
Languages : en
Pages : 152

Book Description
Contributions from Viral Acharya, Joshua Aizenman, Franklin Allen, Thorsten Beck, Erik Bergl f, Claudia Buch, Elena Carletti, Ralph de Haas, Luis Garicano, Andrew Gimber, Charles Goodhart, Vasso Ioannidou, Daniel Gros, Dirk Schoenmaker, Geoffrey Underhill, Wolf Wagner, Benjamin Weigert, Frank Westermann, Charles Wyplosz and Jeromin Zettelmeyer.

European Banking Supervision

European Banking Supervision PDF Author: André Sapir
Publisher:
ISBN: 9789078910411
Category : Business & Economics
Languages : en
Pages : 182

Book Description
European banking supervision, also known as the Single Supervisory Mechanism, is the first and arguably the main component of European banking union. In late 2014, the European Central Bank became the supervisor for the region's largest banking groups; the ECB also oversees the supervision by national authorities of smaller banks. This Blueprint is the first in-depth study of how this ground-breaking reform is working in practice. Despite teething troubles and occasional misjudgements, this assessment finds that overall European banking supervision has been effective, demanding and broadly fair, at least for the banks under the ECB's direct watch. Even so, achieving a truly single market in banking services will require more time, further supervisory initiatives and new Europe-wide regulatory and legislative steps.

Prudential Supervision

Prudential Supervision PDF Author: Frederic S. Mishkin
Publisher: University of Chicago Press
ISBN: 0226531937
Category : Business & Economics
Languages : en
Pages : 379

Book Description
Since banking systems play a crucial role in maintaining the overall health of the economy, the adverse effects of poorly supervised systems may be quite severe. Without some form of vigilant external oversight, banking systems could fall prey to excessive risk taking, moral hazard, and corruption. Prudential supervision provides that oversight, using government regulation and monitoring to ensure the soundness of the banking system and, by extension, the economy at large. The contributors to this thoughtful volume examine the current state of prudential supervision, focusing on fundamental issues and key pragmatic concerns. Why is prudential supervision so important? What kinds of excess must it guard against? What particular forms does it take? Which of these are the most effective deterrents against mismanagement and system overload in today's rapidly shifting financial climate? The contributors foresee a continued movement beyond simple regulatory rules in banking and toward a more active evaluation and supervision of a bank's risk management practices.

Governance of International Banking

Governance of International Banking PDF Author: Dirk Schoenmaker
Publisher: Oxford University Press
ISBN: 0199971617
Category : Business & Economics
Languages : en
Pages : 238

Book Description
Global governance of international banks is breaking down after the Great Financial Crisis, as national regulators are withdrawing on their home turf. New evidence presented illustrates that the global systemically important banks underpin the global financial system. This book offers solutions for the effective governance of global banks.

How Foreign Participation and Market Concentration Impact Bank Spreads

How Foreign Participation and Market Concentration Impact Bank Spreads PDF Author: Ashoka Mody
Publisher: World Bank Publications
ISBN:
Category : Bancos extranjeros
Languages : en
Pages : 33

Book Description
Increasing foreign participation and high concentration levels characterize the recent evolution of banking sectors' market structures in developing countries. Martinez Peria and Mody analyze the impact of these factors on Latin American bank spreads during the late 1990s. Their results suggest that foreign banks were able to charge lower spreads relative to domestic banks. This was more so for de novo foreign banks than for those that entered through acquisitions. The overall level of foreign bank participation seemed to influence spreads indirectly, primarily through its effect on administrative costs. Bank concentration was positively and directly related to both higher spreads and costs. This paper--a product of Finance, Development Research Group--is part of a larger effort in the group to understand banking sector market structure changes in developing countries.

International Convergence of Capital Measurement and Capital Standards

International Convergence of Capital Measurement and Capital Standards PDF Author:
Publisher: Lulu.com
ISBN: 9291316695
Category : Bank capital
Languages : en
Pages : 294

Book Description


Time to Set Banking Regulation Right

Time to Set Banking Regulation Right PDF Author: Jacopo Carmassi
Publisher:
ISBN: 9789461381750
Category : Business & Economics
Languages : en
Pages : 0

Book Description
Excessive leverage and risk taking by large international banks were the main causes of the 2008-09 financial crisis and the ensuing sharp drop in economic activity and employment. World leaders and central bankers promised that it would not happen again and, to this end, undertook to overhaul banking regulation, first and foremost by rectifying Basel prudential rules. This study argues that the new Basel III Accord and the ensuing EU Capital Requirements Directive IV fail to correct the two main shortcomings of international prudential rules: reliance on banks' risk management models for the calculation of capital requirements and the lack of accountability by supervisors. Accordingly, the authors propose the calculation of capital requirements without risk adjustment and creation of a system of mandated action by supervisors modeled on the U.S. framework of Prompt Corrective Action. They also recommend that banks should be required to issue large amounts of debentures that are convertible into equity in order to strengthen market discipline on management and shareholders.