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Institutional structures of financial sector supervision, their drivers and historical benchmarks

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  • Melecky, Martin
  • Podpiera, Anca Maria
Abstract
This paper studies institutional structures of prudential and business conduct supervision of financial services in 98 high and middle income countries over the past decade. It identifies possible drivers of changes in these supervisory structures using the panel ordered probit analysis. The results show that (i) more developed, small open economies with better public governance tend to integrate their supervision, especially the prudential one; (ii) more financially developed countries integrate more their supervision; however, greater development of the non-bank financial system leads to less integrated prudential supervision but not business conduct supervision; (iii) the lobbying power of concentrated and highly profitable banking sectors significant hinders business conduct integration; (vi) countries that experienced financial crises integrate their supervisory structure relatively more and (v) greater central bank independence could cause less integration of prudential supervision, but not necessarily of business conduct supervision.

Suggested Citation

  • Melecky, Martin & Podpiera, Anca Maria, 2013. "Institutional structures of financial sector supervision, their drivers and historical benchmarks," Journal of Financial Stability, Elsevier, vol. 9(3), pages 428-444.
    • Handle: RePEc:eee:finsta:v:9:y:2013:i:3:p:428-444
    DOI: 10.1016/j.jfs.2013.03.003
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    References listed on IDEAS

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    Cited by:

    1. Donato Masciandaro & Davide Romelli, 2017. "Twin Peaks And Central Banks: Economics, Political Economy And Comparative Analysis," BAFFI CAREFIN Working Papers 1768, BAFFI CAREFIN, Centre for Applied Research on International Markets Banking Finance and Regulation, Universita' Bocconi, Milano, Italy.
    2. Alin Marius Andries & Anca Maria Podpiera & Nicu Sprincean, 2022. "Central Bank Independence and Systemic Risk," International Journal of Central Banking, International Journal of Central Banking, vol. 18(1), pages 81-130, March.
    3. Gaganis, Chrysovalantis & Pasiouras, Fotios & Wohlschlegel, Ansgar, 2021. "Allocating supervisory responsibilities to central bankers: Does national culture matter?," International Review of Law and Economics, Elsevier, vol. 67(C).
    4. D’Orazio, Paola & Popoyan, Lilit, 2023. "Do monetary policy mandates and financial stability governance structures matter for the adoption of climate-related financial policies?," International Economics, Elsevier, vol. 173(C), pages 284-295.
    5. repec:zbw:bofitp:2020_013 is not listed on IDEAS
    6. D. Masciandaro, 2019. "What Bird Is That? Central Banking And Monetary Policy In The Last Forty Years," BAFFI CAREFIN Working Papers 19127, BAFFI CAREFIN, Centre for Applied Research on International Markets Banking Finance and Regulation, Universita' Bocconi, Milano, Italy.
    7. Shaddady, Ali & Moore, Tomoe, 2019. "Investigation of the effects of financial regulation and supervision on bank stability: The application of CAMELS-DEA to quantile regressions," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 58(C), pages 96-116.
    8. Melecky,Martin & Podpiera,Anca Maria, 2015. "Placing Bank supervision in the Central Bank : implications for financial stability based on evidence from the global crisis," Policy Research Working Paper Series 7320, The World Bank.
    9. Fraccaroli, Nicolò, 2019. "Supervisory governance, capture and non‑performing loans," Bank of England working papers 820, Bank of England.
    10. Alin Marius ANDRIEȘ & Sabina CAZAN & Nicu SPRINCEAN, 2022. "The Nexus between Bank M&As and Financial Development," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(2), pages 5-28, April.
    11. Mertzanis, Charilaos, 2020. "Financial supervision structure, decentralized decision-making and financing constraints," Journal of Economic Behavior & Organization, Elsevier, vol. 174(C), pages 13-37.
    12. Masciandaro, Donato, 2022. "Independence, conservatism, and beyond: Monetary policy, central bank governance and central banker preferences (1981–2021)," Journal of International Money and Finance, Elsevier, vol. 122(C).
    13. Maimbo, Samuel Munzele & Melecky, Martin, 2014. "Financial sector policy in practice : benchmarking financial sector strategies around the world," Policy Research Working Paper Series 6746, The World Bank.
    14. Alin Marius Andries & Anca Maria Podpiera & Nicu Sprincean, 2022. "Central Bank Independence and Systemic Risk," International Journal of Central Banking, International Journal of Central Banking, vol. 18(1), pages 81-130, March.
    15. Roman Horvath, 2020. "Peer Effects in Central Banking," IMF Economic Review, Palgrave Macmillan;International Monetary Fund, vol. 68(4), pages 764-814, December.
    16. Sawa Omori, 2024. "Do institutions matter? Political economy of the enhancement of banking supervision," Journal of Banking Regulation, Palgrave Macmillan, vol. 25(1), pages 73-83, March.
    17. Horváth, Roman & Vaško, Dan, 2016. "Central bank transparency and financial stability," Journal of Financial Stability, Elsevier, vol. 22(C), pages 45-56.
    18. Donato Masciandaro, 2021. "Central Bank Governance in Monetary Policy Economics (1981-2020)," BAFFI CAREFIN Working Papers 21153, BAFFI CAREFIN, Centre for Applied Research on International Markets Banking Finance and Regulation, Universita' Bocconi, Milano, Italy.
    19. Karel Janda & Oleg Kravtsov, 2020. "Banking Supervision and Risk-Adjusted Performance inthe Host Country Environment," FFA Working Papers 3.001, Prague University of Economics and Business, revised 19 Nov 2020.
    20. Martin Melecky & Anca Maria Podpiera, 2016. "Central Bank Design and Banking Supervision," BAFFI CAREFIN Working Papers 1630, BAFFI CAREFIN, Centre for Applied Research on International Markets Banking Finance and Regulation, Universita' Bocconi, Milano, Italy.
    21. Masciandaro, Donato & Romelli, Davide, 2018. "Central bankers as supervisors: Do crises matter?," European Journal of Political Economy, Elsevier, vol. 52(C), pages 120-140.
    22. Doumpos, Michael & Gaganis, Chrysovalantis & Pasiouras, Fotios, 2015. "Central bank independence, financial supervision structure and bank soundness: An empirical analysis around the crisis," Journal of Banking & Finance, Elsevier, vol. 61(S1), pages 69-83.

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