Bank supervision Russian style: Evidence of conflicts between micro- and macroprudential concerns

Sophie Claeys and Koen Schoors

No 205, Working Paper Series from Sveriges Riksbank (Central Bank of Sweden)

Abstract: Supervisors sometimes have to manage both the micro- and macro- prudential dimensions of bank stability. These may either conflict or complement each other. We analyze prudential supervision by the Central Bank of Russia (CBR). We find evidence of micro-prudential concerns, measured as the rule-based enforcement of bank standards. Macro-prudential concerns are also documented: Banks in concentrated bank markets, large banks, money center banks and large deposit banks are less likely to face license withdrawal. Further, the CBR is reluctant to withdraw licenses when there are “too many banks to fail”. Finally, macro-prudential concerns induce regulatory forbearance, revealing conflicts with micro-prudential objectives.

Keywords: Prudential Supervision; Bank Stability; Systemic Stability (search for similar items in EconPapers)
JEL-codes: E50 G20 N20 (search for similar items in EconPapers)
Pages: 42 pages
Date: 2007-03-01
New Economics Papers: this item is included in nep-ban, nep-cba, nep-cis, nep-mac, nep-reg and nep-tra
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (31)

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Journal Article: Bank supervision Russian style: Evidence of conflicts between micro- and macro-prudential concerns (2007)
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Persistent link: https://EconPapers.repec.org/RePEc:hhs:rbnkwp:0205

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