The reverse revolving door in the supervision of European banks

Stefano Colonnello, Michael Koetter, Alex Sclip and Konstantin Wagner

No 25/2023, IWH Discussion Papers from Halle Institute for Economic Research (IWH)

Abstract: We assemble data about executives on the boards of national supervisory authorities (NSA) in European banking, which reveal that 40% have an employment history in the financial industry. Appointment patterns to NSA boards differ substantially across countries. Generally, the appointment of former finance professionals as prudential supervisors is inconsequential for banks‘ valuations, capitalization, and asset growth. The exception are positive, but short-lived valuation effects for those banks whose alumni are appointed as executives of directly responsible NSA boards. Circumstantial evidence suggests that a “proximity bias“ is a more likely driver of this effect instead of superior financial expertise or intrinsic skills of the designated NSA executives.

Keywords: banking supervision; conflicts of interest; revolving door (search for similar items in EconPapers)
JEL-codes: G14 G21 G28 (search for similar items in EconPapers)
Date: 2026, Revised 2026
New Economics Papers: this item is included in nep-ban, nep-eec and nep-eur
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https://www.econstor.eu/bitstream/10419/281191.2/1 ... ter_Sclip_Wagner.pdf (application/pdf)

Related works:
Working Paper: The Reverse Revolving Door in the Supervision of European Banks (2023)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:iwhdps:281191

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