Regulatory and Supervisory Independence and Financial Stability

Quintyn, Marc

doi:10.1093/cesifo/49.2.259

Cited by 120 publications

(94 citation statements)

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“…Alternatively, powerful supervisors may exert a negative influence by using their powers to benefit favored constituents, attract campaign donations, and extract bribes Djankov, et. al., 2002;and Quintyn and Taylor, 2002]. If so, there will be less interest in overcoming market failures and more interest in seeking personal gain.…”

Section: Iie Supervisionmentioning

confidence: 99%

Bank Regulation and Supervision: What Works Best?

Barth¹,

Caprio²,

Levine³

2002

306

382

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This paper uses our new database on bank regulation and supervision in 107 countries to assess the relationship between specific regulatory and supervisory practices and banking-sector development, efficiency, and fragility. The paper examines: (i) regulatory restrictions on bank activities and the mixing of banking and commerce; (ii) regulations on domestic and foreign bank entry; (iii) regulations on capital adequacy; (iv) deposit insurance system design features; (v) supervisory power, independence, and resources, (vi) loan classification stringency, provisioning standards, and diversification guidelines; (vii) regulations fostering information disclosure and privatesector monitoring of banks; and (viii) government ownership. The results, albeit tentative, raise a cautionary flag regarding government policies that rely excessively on direct government supervision and regulation of bank activities. The findings instead suggest that policies that rely on guidelines that (1) force accurate information disclosure, (2) empower private-sector corporate control of banks, and (3) foster incentives for private agents to exert corporate control work best to promote bank development, performance and stability.

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Section: Iie Supervisionmentioning

confidence: 99%

Bank Regulation and Supervision: What Works Best?

Barth¹,

Caprio²,

Levine³

2002

306

382

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“…In contrast, only 9 percent of respondents think 43 See Masciandaro, Quintyn and Taylor (2008). 44 Quintyn andTaylor (2003 and, and Hűpkes, Quintyn and Taylor (2005). 45 Quintyn and Taylor (2003).…”

Section: Governance Of the Present Structurementioning

confidence: 99%

“…44 Quintyn andTaylor (2003 and, and Hűpkes, Quintyn and Taylor (2005). 45 Quintyn and Taylor (2003). accountability is high.…”

Section: Governance Of the Present Structurementioning

confidence: 99%

Helping Hand or Grabbing Hand? Supervisory Architecture, Financial Structure and Market View

Quintyn

Masciandaro²

2008

IMF Working Papers

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This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate.The literature stresses the importance of financial market characteristics in determining the supervisory architectures. In the real world it is not always clear to what extent market features are taken into account. We present two complementary approaches to gain insights in the above relationship. First, an empirical test of two theories-the helping and the grabbing hand view of government-seems more consistent with the latter, presuming the market demonstrates a preference for consolidation of supervisory powers. Second, a survey among financial CEOs in Italy confirms a preference for a consolidated supervisory regime and reveals only weak consistency between the views of the policymakers and the market operators. JEL Classification Numbers: G18, G28, E58

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“…Political interference in the supervisory process generally appears "to sweep problems under the rug" and postpones the recognition of the severity of the crises and thereby delays an effective intervention to financial system Taylor, 2002 andMishkin, 2001). …”

Section: Independency Of Regulatory and Supervisory Body: Whither Desmentioning

confidence: 99%

“…Other adverse outcomes of independent RSB are associated with generating new institutional rigidities and imposing tight-regulations over the industry, which aggravates to the cost of doing business (Quintyn & Taylor, 2002). Given this considerations, the politicians do not want to create a "fourth branch of government" in addition to legislative, executive and judiciary branches…”

Section: Independency Of Regulatory and Supervisory Body: Whither Desmentioning

confidence: 99%

Assessing the Preconditions in Establishing an Independent Regulatory and Supervisory Agency in Globalized Financial Markets: The Case of Turkey

Regulation

Aysan

2006

SSRN Journal

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Recent financial crises highlight weaknesses in financial markets and the need for regulatory and supervisory bodies (RSB) to improve the stability of financial markets. Currently, international institutions like the IMF and the World Bank place the independent RSB among their principle policy recommendations to developing countries. This paper acknowledges the importance of independent RSB for the proper functioning of financial markets. However, this paper also points out the preconditions to establish independent RSB. Unless certain prerequisites are satisfied, policy recommendations to construct an independent RSB are doomed to fail. The recent Turkish experience is provided as a case study to elucidate this conclusion. This paper first presents the arguments for independent RSB and the policy recommendations in institution building for stronger financial system. Then, the background of Turkish experience for independent RSB is provided. Finally, we analyze the primary reasons for the deficient performance of Turkish RSB over the last five years in an attempt to provide actual lessons for the future institutional reforms.

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Regulatory and Supervisory Independence and Financial Stability

Cited by 120 publications

References 0 publications

Bank Regulation and Supervision: What Works Best?

Bank Regulation and Supervision: What Works Best?

Helping Hand or Grabbing Hand? Supervisory Architecture, Financial Structure and Market View

Assessing the Preconditions in Establishing an Independent Regulatory and Supervisory Agency in Globalized Financial Markets: The Case of Turkey

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