Financial Regulation and Supervision in the Euro Area: A Four-Peak Proposal

Giorgio Di Giorgio and Carmine Di Noia

Center for Financial Institutions Working Papers from Wharton School Center for Financial Institutions, University of Pennsylvania

Abstract: In this paper, we discuss pros and cons of different models for financial market regulation and supervision and we present a proposal for the re-organisation of regulatory and supervisory agencies in the Euro Area. Our arguments are consistent with both new theories and effective behaviour of financial intermediaries in industrialized countries. Our proposed architecture for financial market regulation is based on the assignment of different objectives or "finalities" to different authorities, both at the domestic and the European level. According to this perspective, the three objectives of supervision - microeconomic stability, investor protection and proper behaviour, efficiency and competition - should be assigned to three distinct European authorities, each one at the centre of a European system of financial regulators and supervisors specialized in overseeing the entire financial market with respect to a single regulatory objective and regardless of the subjective nature of the intermediaries. Each system should be structured and organized similarly to the European System of Central Banks and work in connection with the central bank which would remain the institution responsible for price and macroeconomic stability. We suggest a plausible path to build our 4-peak regulatory architecture in the Euro area.

Date: 2001-01
New Economics Papers: this item is included in nep-acc, nep-fmk and nep-reg
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Citations: View citations in EconPapers (13)

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