Banking on the principles: Compliance with Basel Core Principles and bank soundness

Asli Demirguc-Kunt, Enrica Detragiache () and Thierry Tressel ()

Journal of Financial Intermediation, 2008, vol. 17, issue 4, 511-542

Abstract: This study finds that banks receive more favorable Moody's financial strength ratings in countries with better compliance with Basel Core Principles related to information provision. The results are robust to controlling for broad indexes of institutional quality, macroeconomic variables, sovereign ratings, and reverse causality. Compliance with other Core Principles does not affect ratings robustly. Measuring bank soundness through Z-scores yields broadly similar results for advanced and emerging markets. Countries aiming to upgrade banking regulation and supervision should consider giving priority to information provision over other elements of the core principles.

Keywords: Bank; soundness; Regulation; and; supervision; Basel; Core; Principles (search for similar items in EconPapers)
Date: 2008
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (152)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S1042-9573(07)00078-2
Full text for ScienceDirect subscribers only

Related works:
Working Paper: Banking on the Principles: Compliance with Basel Core Principles and Bank Soundness (2006)
Working Paper: Banking on the principles: compliance with Basel Core Principles and bank soundness (2006)
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:eee:jfinin:v:17:y:2008:i:4:p:511-542

Access Statistics for this article

Journal of Financial Intermediation is currently edited by Elu von Thadden

More articles in Journal of Financial Intermediation from Elsevier
Bibliographic data for series maintained by Catherine Liu ().