Placing Bank Supervision in the Central Bank
Placing Bank Supervision in the Central Bank
Although keeping bank supervision independent from macroprudential supervision may ensure more checks and balances, placing bank supervision in the central bank could exploit synergies with macroprudential supervision. This paper studies whether placing microprudential supervision of banks, typically the systemic part of the financial system, under the same roof as financial stability policy, typically entrusted to the central bank, can improve financial stability. Specifically, the paper analyzes whether having bank supervision in the central bank mitigated the likelihood of banking crises during 2007–12. The analysis conditions on crisis indicators commonly found in the early-warning models of banking crises, the quality of microprudential supervision, and the quality of macroprudential supervision. The authors find that countries with deeper financial markets and those undergoing rapid financial deepening can better foster financial stability when they put bank supervision in the central bank.
- World Bank United States
BANK POLICY, BANKING SYSTEM, GROSS DOMESTIC PRODUCT, BANKING SUPERVISION, DEPOSIT, CURRENCY CRISIS, INFLATION, INSTITUTIONAL DEVELOPMENT, BANKING SECTORS, INTERNATIONAL SETTLEMENTS, EMERGING MARKET, CRITERIA, DEPOSIT INSURANCE, LENDING, PRICE STABILITY, CRISIS’ COUNTRIES, MACROECONOMICS, FEDERAL RESERVE, MANDATES, REAL INTEREST RATE, LIQUIDATIONS, RULE OF LAW, LENDER OF LAST RESORT, FINANCIAL CRISIS, GOVERNMENTS, CREDIT GROWTH, POLITICAL STABILITY, SHARES, SUPERVISORY AUTHORITY, BANK, MORAL HAZARD, LOANS, SYSTEMIC BANKING CRISES, CONFLICTS OF INTEREST, FINANCIAL SYSTEMS, BANK FOR INTERNATIONAL SETTLEMENTS, RISK MANAGEMENT, CHECK, MICROSTRUCTURES, FINANCIAL DEEPENING, BANKING CRISIS, REAL EXCHANGE RATE, 330, EMERGING MARKETS, FINANCIAL MARKETS, SOLVENCY, FINANCIAL OPENNESS, BALANCE OF PAYMENTS, DEPOSITS, MARKETS, FINANCIAL REGULATION, FINANCE, FINANCIAL DISTRESS, SYSTEMIC RISK, INTERNATIONAL FINANCE, FEDERAL RESERVE BANK, INTERNATIONAL FINANCIAL STATISTICS, BANKING, CURRENCY DEPRECIATION, LIABILITIES, MONETARY POLICY, BIS, REAL INTEREST, LIQUIDITY, BANK REGULATIONS, DUMMY VARIABLE, INTEREST RATES, CREDIT POLICIES, DEBT, CREDIT RISK, GUARANTEES, SUPERVISION OF BANKS, MARKET, SAVING, DOMESTIC CREDIT, CRISIS COUNTRIES, RESERVE BANK, CENTRAL BANKING, BANKING SYSTEMS, CENTRAL BANK, BANKING STABILITY, SUPERVISORY POWERS, BANK REGULATION, PROPERTIES, CREDIBILITY, CURRENCY CRISES, POLITICAL ECONOMY, EXCHANGE, LENDER, INTERNATIONAL ECONOMICS, VALUE, RISK, BANK PROFITS, REAL INTEREST RATES, FINANCIAL CRISES, FINANCIAL SYSTEM, RESERVE, EXCHANGE RATE, GOOD, FINANCIAL STABILITY, INSURANCE, CURRENCY, MACROECONOMIC VARIABLES, PRIVATE CREDIT, BANKS, BANK RESTRUCTURING, MICRODATA, DEFAULT, BALANCE OF PAYMENT, PROFITS, LOAN, BANKING CRISES, DEBT CRISIS, CREDIT, BANK CREDIT, FINANCIAL DEVELOPMENT, DEVELOPING COUNTRIES, INTERNATIONAL BANK, NONPERFORMING LOANS, FUTURE, INFORMATION DISCLOSURE, PRUDENTIAL SUPERVISION, BANK NATIONALIZATIONS, MONETARY FUND, CENTRAL BANKS, HOUSING, INTEREST, MACROECONOMIC CONDITIONS, SUPERVISORY AUTHORITIES, BANK SUPERVISION, LIQUIDITY RISK, CAPITAL INFLOWS, CHECKS, SHARE, INTEREST RATE, LOCAL CURRENCY, MICROSTRUCTURE, ACCOUNTABILITY
BANK POLICY, BANKING SYSTEM, GROSS DOMESTIC PRODUCT, BANKING SUPERVISION, DEPOSIT, CURRENCY CRISIS, INFLATION, INSTITUTIONAL DEVELOPMENT, BANKING SECTORS, INTERNATIONAL SETTLEMENTS, EMERGING MARKET, CRITERIA, DEPOSIT INSURANCE, LENDING, PRICE STABILITY, CRISIS’ COUNTRIES, MACROECONOMICS, FEDERAL RESERVE, MANDATES, REAL INTEREST RATE, LIQUIDATIONS, RULE OF LAW, LENDER OF LAST RESORT, FINANCIAL CRISIS, GOVERNMENTS, CREDIT GROWTH, POLITICAL STABILITY, SHARES, SUPERVISORY AUTHORITY, BANK, MORAL HAZARD, LOANS, SYSTEMIC BANKING CRISES, CONFLICTS OF INTEREST, FINANCIAL SYSTEMS, BANK FOR INTERNATIONAL SETTLEMENTS, RISK MANAGEMENT, CHECK, MICROSTRUCTURES, FINANCIAL DEEPENING, BANKING CRISIS, REAL EXCHANGE RATE, 330, EMERGING MARKETS, FINANCIAL MARKETS, SOLVENCY, FINANCIAL OPENNESS, BALANCE OF PAYMENTS, DEPOSITS, MARKETS, FINANCIAL REGULATION, FINANCE, FINANCIAL DISTRESS, SYSTEMIC RISK, INTERNATIONAL FINANCE, FEDERAL RESERVE BANK, INTERNATIONAL FINANCIAL STATISTICS, BANKING, CURRENCY DEPRECIATION, LIABILITIES, MONETARY POLICY, BIS, REAL INTEREST, LIQUIDITY, BANK REGULATIONS, DUMMY VARIABLE, INTEREST RATES, CREDIT POLICIES, DEBT, CREDIT RISK, GUARANTEES, SUPERVISION OF BANKS, MARKET, SAVING, DOMESTIC CREDIT, CRISIS COUNTRIES, RESERVE BANK, CENTRAL BANKING, BANKING SYSTEMS, CENTRAL BANK, BANKING STABILITY, SUPERVISORY POWERS, BANK REGULATION, PROPERTIES, CREDIBILITY, CURRENCY CRISES, POLITICAL ECONOMY, EXCHANGE, LENDER, INTERNATIONAL ECONOMICS, VALUE, RISK, BANK PROFITS, REAL INTEREST RATES, FINANCIAL CRISES, FINANCIAL SYSTEM, RESERVE, EXCHANGE RATE, GOOD, FINANCIAL STABILITY, INSURANCE, CURRENCY, MACROECONOMIC VARIABLES, PRIVATE CREDIT, BANKS, BANK RESTRUCTURING, MICRODATA, DEFAULT, BALANCE OF PAYMENT, PROFITS, LOAN, BANKING CRISES, DEBT CRISIS, CREDIT, BANK CREDIT, FINANCIAL DEVELOPMENT, DEVELOPING COUNTRIES, INTERNATIONAL BANK, NONPERFORMING LOANS, FUTURE, INFORMATION DISCLOSURE, PRUDENTIAL SUPERVISION, BANK NATIONALIZATIONS, MONETARY FUND, CENTRAL BANKS, HOUSING, INTEREST, MACROECONOMIC CONDITIONS, SUPERVISORY AUTHORITIES, BANK SUPERVISION, LIQUIDITY RISK, CAPITAL INFLOWS, CHECKS, SHARE, INTEREST RATE, LOCAL CURRENCY, MICROSTRUCTURE, ACCOUNTABILITY
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