Who Should Supervise? The Structure of Bank Supervision and the Performance of the Financial System

Eichengreen, Barry; Dinçer, N. Nergiz

doi:10.3386/w17401

Cited by 32 publications

(13 citation statements)

References 9 publications

(7 reference statements)

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“…Introduction. Under present conditions of countries' development, there is a need to revise the existing approaches to state regulation of all systems, in particular, business models of insurance markets (Eichengreen and Dincer, 2011). Countries of the world have intensified the process of transition to various models of state regulation (Cihak and Podpiera, 2006;Nier, et al, 2011), which necessitates an assessment of the state of development of various markets under the influence of existing regulatory tools (Horakova, 2012).…”

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confidence: 99%

Information Management: the Key Driver of the Economic System’s Development

Bacho

Pukala

Hlibko³

et al. 2019

MMI

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In the scientific article, an information management model was developed for assessing the influence of regulatory tools on business processes on the example of the insurance market of Ukraine. The main purpose of the research is to determine the role of information management as a key driver of business process development in economic systems (on the example of the Ukrainian insurance market). Systematization literary sources and approaches for solving the problem indicates that the development of innovative tools of public governance for the assessment of the regulatory influence of the state regulatory body on the business processes of insurance market is not completed and requires a more in-depth study. The formation of a system of indicators characterizing the business processes of insurance market, which take into account the influence of the Regulator's tools, is proposed to be implemented in the following sequence: to find out the causal links between the indicators of business processes of insurance market and the measures; to determine the existence of the reaction of business processes’ indicators of insurance market to the Regulator’s measures, taking into account the time gap, which determines the presence of lags in the process of applying the Regulator's measures; to define and formalize the variability of the business processes’ indicators of insurance market under the influence of the Regulator's measures. Then the scale of the state of insurance market was built: firstly, check for normality the distribution of the indicators’ values of these markets; secondly, in compliance with the distribution law to construct the scale of indicators according to the «three-sigma rule»; thirdly, in the case of nonconformance with the normal distribution law and presence of skewness, the method of «three sigma» may be used, but either the arithmetic mean, or the mode of the variation series, or its median, is taken as the reference point. The relevance of the decision of this scientific problem is that a set of models is developed for establishing causal relationships between the indicators characterizing the business processes of the insurance market and government regulation instruments, which are quantitatively determined, are theoretical and practical basis for their possible application for solving universal modeling problems of causal processes of estimating the influence of the taken decisions at any regulation of business processes. To solve the problem the Granger-test, the expanded Dickey-Fuller test, the Phillips-Perron test and the Kwiatkowski-Phillips-Schmidt-Shin test were applied. Time series distribution on stationarity and construction of vector autoregression models are implemented. In order to evaluate the adequacy of the models, a comparison of values of Fisher's, Student's criteria, determination coefficient and adjusted determination coefficient is used. Jarque-Bera criteria are used to test the model for stationarity, stability. The formalization of cause-and-effect relationships through the postulate of the theory of measurements and the construction of scales is performed. The built interval scales are based on the application of the three sigma rule, which made possible to specify the allowable boundary values of the indicators. The obtained results testify the influence of regulatory tools on the business processes of insurance market, which confirms the correctness of the use of this complex of models for the solution of weakly formalized problems of causal nature of universal type. The proposed innovative model can be used as a methodology for developing a set of rational methods for assessing informational influences of management decisions in production systems or marketing research. The results of the research can be used to evaluate the business processes of any market or system. Keywords: business processes, Granger test, informational management, informational model, insurance key driver, services market, regulation tools, scaling, vector autoregression.

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confidence: 99%

Information Management: the Key Driver of the Economic System’s Development

Bacho

Pukala

Hlibko³

et al. 2019

MMI

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“…Despite of that, Masciandaro and Quintyn (2009) and Eichengreen and Dincer (2011) shows that there is in increasing trend of diminishing central bank involvement in the supervision of financial industry. According to Cukierman (2011), although central bank involvement as systemic regulator may be important to provide necessary liquidity injection when a crisis erupts.…”

Section: Central Bank Involvement In Financial Supervisionmentioning

confidence: 99%

“…Some studies argues that central banks involvement could provide economies of scale and informational advantages (Blinder, 2010, Lamfalussy, 2011Papademos, 2010), and better equiped human capital to manage supervisory issues (Lamfalussy, 2011). On the other hand, some studies argue that central bankers may fall captive to the interest of banking industry Ponce, 2011, 2012), and the unification between monetary and supervision function in the central bank may produce complicated bureaucracy (Blinder, 2010;Goodhart, 2010;and Eichengreen and Dincer, 2011) Other literatures suggest that central bank involvement in supervision may well be avoided because of the empirical results that shows (i) bank profit efficiency tends to decrease as the number of financial sectors monitored by central banks increases (Gaganis, and Pasiouras, 2013), (ii) the performance of financial market is better when supervision is conducted by agency outside central banks (Eichengreen and Dincer, 2011), and (iii) Central bank involvement in supervision does not affect macroeconomic resilience during financial crisis (Masciandaro et al, 2011).…”

Section: Central Bank Involvement In Financial Supervisionmentioning

confidence: 99%

The Number of Financial Regulatory Authorities and Financial Stability: Cross-Country Experiences

Soedarmono¹,

Sitorus²

2014

BEMP

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This paper attempts to provide evidence whether or not the unification of regulatory institutions for different types of financial sector creates challenges for financial stability. From a sample of 91 countries that provide data on the financial unification index and the central bank involvement index, the empirical results reveal that higher financial unification index or the convergence toward a single supervisory institution outside the central bank, in order to control three different sectors (banking, insurance, and securities), is detrimental for financial stability. However, this finding only holds for developed countries, but dissapears for less developed countries. In parallel, the central bank involvement in financial sector supervision has no impact on financial stability in both developed and less developed countries. Keywords: Supervisory Regimes, Financial Sectors, Financial Stability JEL Classification: G18, G21, G28

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“…For recent work examining the economic consequences of financial supervisory governance see Levine (2004, 2006), Eichengreen and Dincer (2011), Jordana and Rosas (2011), Masciandaro, Panisini and Quintyn (2011), Quintyn and Taylor (2003.…”

Section: Notesmentioning

confidence: 99%

The diffusion of financial supervisory governance ideas

Gandrud

2013

Review of International Political Economy

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This is the accepted version of the paper.This version of the publication may differ from the final published version. To answer this question I draw on two political economy literatures. The first is sociological constructivism. This is a broad group that includes work by Blyth (1997), Chwieroth (2010), Dobbin (1994, Sikkink (1998, 2001), Jacobs (2008), McNamara (1998McNamara ( , 2002, Windmaier, Blyth and Permanent repository linkSeabrooke (2007), and Yee (1996). One important component of this literature is the assertion that new, socially spread ideas (see Fligstein, 2001) can shape policymakers' understanding of how policies achieve their goals. Ideas can change what policies actors are likely to prefer and implement. According to this approach, the promotion of the SEC or FSA models as "best practice" by prominent and powerful international institu-

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Who Should Supervise? The Structure of Bank Supervision and the Performance of the Financial System

Cited by 32 publications

References 9 publications

Information Management: the Key Driver of the Economic System’s Development

Information Management: the Key Driver of the Economic System’s Development

The Number of Financial Regulatory Authorities and Financial Stability: Cross-Country Experiences

The diffusion of financial supervisory governance ideas

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