On the design of public institutions: Evidence from financial supervision

Volker Nitsch

Revista ESPE - Ensayos Sobre Política Económica, 2015, vol. 33, issue 76, No 13847, 53-60

Abstract: This paper studies the allocation of the functions and responsibilities of prudential supervision on public authorities, including the central bank. In particular, it is argued that there are interdependencies in the design of institutions; political decisions on the supervisory structure are not taken in isolation. Analyzing a panel data set of prudential supervision regimes in 98 countries over the period from 1999 to 2010, I find that central banks play a smaller role in supervision and tasks are more decentralized if the central bank is independent and transparent. Measures of firm and fiscal decentralization are typically associated with a greater centralization of supervisory functions outside of the central bank. ****** En el presente ensayo se estudia la asignación de funciones y responsabilidades de supervisión prudencial en autoridades públicas, entre las que se incluye el banco central. En concreto se aduce que existen interdependencias en el diseno de las instituciones; las decisiones políticas acerca de la estructura de supervisión no se toman de manera aislada. Mediante el análisis de un panel de datos sobre regímenes de supervisión prudencial en 98 países durante período entre 1999 y 2010 se encuentra que los bancos centrales desempenan un papel menor en la supervisión y que las tareas se descentralizan más si el banco central es independiente y transparente. Las medidas de descentralización corporativa y fiscal se asocian típicamente con una mayor centralización de las funciones de supervisión fuera del banco central.

Keywords: Financial; Prudential; Supervision; Institution; Authority (search for similar items in EconPapers)
JEL-codes: E58 G28 H83 (search for similar items in EconPapers)
Date: 2015
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https://doi.org/10.1016/j.espe.2014.12.002

Related works:
Journal Article: On the design of public institutions: Evidence from financial supervision (2015)
Working Paper: On the Design of Public Institutions: Evidence from Financial Supervision (2014)
Working Paper: On the Design of Public Institutions: Evidence from Financial Supervision (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:col:000107:013847

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