Centralized Decision Making and Informed Lobbying

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Section: Introductionmentioning

confidence: 93%

Optimal Supervisory Architecture and Financial Integration in a Banking Union

Colliard

2018

“…Hiriart, Martimort, and Pouyet (2010) erful tool against regulatory capture. Costa Lima, Moreira, and Verdier (2012) show on the contrary some benefits of centralization. See Boyer and Ponce (2012) for an application to bank supervision and a review of the relevant literature.…”

Section: Introductionmentioning

confidence: 93%

Optimal Supervisory Architecture and Financial Integration in a Banking Union

Colliard

2017

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. www.econstor.eu Terms of use: Documents in Working Paper SeriesOptimal supervisory architecture and financial integration in a banking union This analysis has several implications for the European Single Supervisory Mechanism.First, it gives theoretically grounded criteria for deciding which banks should be supervised by the ECB, by a national supervisory agency, or by both. Large international banks typically fit the case in which centralizing supervision is optimal, as their international activities both imply high externalities and a lower informational advantage of the national supervisor. Taking into account the complexity or opacity of these banks would allow to further identify large banks that could be supervised jointly.Second, since market conditions should react to the imposition of a more centralized supervisory architecture with more integration, the perimeter of banks supervised by the ECB should at least be flexible enough to respond to changing market conditions. Moreover, I show that a bank or a banking system can be trapped in an equilibrium where cross-border activities are small because supervision is local, and supervision is left at the local level because cross-border activities are small. The decision to allocate a bank to the central supervisor should be forward-looking and take into account that centralized supervision may itself trigger more financial integration and thus more need for such a supervision.

“…The lobbying group anticipates the does not consider interjurisdictional spillovers. Bordignon, Colombo and Galmarini (2008) and Lima, Moreira and Verdier (2017) consider monetary lobbying when comparing centralized and decentralized decision-making, but they do not consider information production by interest groups.…”

Section: Application: Interjurisdictional Spilloversmentioning

confidence: 99%

Persuasion, Spillovers, and Government Interventions

Xiao

2020

We develop a model of Bayesian persuasion with spillovers to investigate the impact of information production on optimal policy design. A sender produces information to persuade a receiver to take an action with external effects, and the government implements corrective subsidies and taxes to maximize social welfare. Subsidies to the sender's preferred action incentivize her to produce less information, while taxes motivating her to produce more. Such an informational effect impacts the receiver's decision and social welfare. We show that the optimal corrective subsidies and taxes may be different from the Pigouvian level. Most notably, the optimal policy is no government intervention when the spillover is positive and small.