Supranational Supervision - How Much and for Whom?

Wolf Wagner (wagner@rsm.nl) and Thorsten Beck

No 9546, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: We argue that the extent to which supervision of banks takes place on the supranational level should be guided by two factors: cross-border externalities from bank failures and heterogeneity in bank failure costs. Based on a simple model we show that supranational supervision is more likely to be welfare enhancing when externalities are high and country heterogeneity is low. This suggests that different sets of countries (or regions) should differ in their supranational orientation. We apply the insights of our model to discuss optimal supervisory arrangements for different regions of the world and contrast them with existing arrangements and current policy initiatives.

Keywords: Bank regulation; Bank resolution; Cross-border banking (search for similar items in EconPapers)
JEL-codes: G21 G28 (search for similar items in EconPapers)
Date: 2013-07
New Economics Papers: this item is included in nep-ban and nep-cba
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (12)

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Journal Article: Supranational Supervision: How Much and for Whom? (2016)
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