The Economics of Supranational Bank Supervision

Thorsten Beck*, Consuelo Silva-Buston, Wolf Wagner

*Corresponding author for this work

Research output: Contribution to journalArticleAcademicpeer-review

3 Citations (Scopus)
2 Downloads (Pure)

Abstract

This article examines the effectiveness of cooperation among bank supervisors using novel data on supranational agreements signed by 93 countries. Exploiting that globally operating banks are differently covered by these agreements, we show that supervisory cooperation generally improves bank stability. The magnitude of the effect is higher for smaller global banks, and when supervisors are more stringent and have access to higher quality information. We also show that actual supervisory cooperation varies across countries consistent with differences in economic costs and benefits of cooperation. This suggests that cooperation is not always desirable, despite being effective in reducing bank risk.

Original languageEnglish
Pages (from-to)324-351
Number of pages28
JournalJournal of Financial and Quantitative Analysis
Volume58
Issue number1
Early online date12 Aug 2022
DOIs
Publication statusPublished - Feb 2023

Bibliographical note

Publisher Copyright:
© THE AUTHOR(S), 2022.

Research programs

  • RSM F&A

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