“One size does not fit all” – institutional determinantsof financial safety net effectiveness

Aleksandra Masłowska-Jokinen and Anna Matysek-Jędrych

No 240, NBP Working Papers from Narodowy Bank Polski

Abstract: The main objective of the study is to identify both similarities and differences among seemingly homogenous countries (OECD) in respect to their safety net de-sign and a supervisory role played by central banks. This goal is achieved using an extensive data set, describing financial supervisory institutions between 2000-2013, hence including recent modifications in response to global financial crisis. The data show the existence of similar supervisory standards in both crisis- and non-crisis countries. Whether it is a presence of single supervisory authority, allocation of macroprudential responsibilities in a country, or implementing capital adequacy re-quirements, while working well in certain countries, did not make others immune to a crisis. At the same time, data show that non-crisis countries implemented stricter rules than those in crisis-countries, and that this process started way before the burst of the Global Financial Crisis. Often, these more rigorous rules were observed in countries with past crisis experience, indicating an importance of learning mecha-nism. With empirical analysis, we prove that certain basic safety net elements (oblig-atory reserve requirements or sufficient coverage of deposit insurance scheme), as well as high level of central bank financial transparency are negatively correlated with the speed of credit growth. Based on our results and discussion on previous empirical analyses we give recommendations for institutions involved in the financial safety net.

Keywords: central bank; financial regulation; financial supervision; monetary pol-icy; financial crisis; macroprudential policy; safety net (search for similar items in EconPapers)
JEL-codes: E52 E58 G01 G18 G21 H12 (search for similar items in EconPapers)
Date: 2016
New Economics Papers: this item is included in nep-cba, nep-cse and nep-mac
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://static.nbp.pl/publikacje/materialy-i-studia/240_en.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:nbp:nbpmis:240

Access Statistics for this paper

More papers in NBP Working Papers from Narodowy Bank Polski Contact information at EDIRC.
Bibliographic data for series maintained by Jakub Growiec ().