The Diffusion of Financial Supervisory Governance Ideas

Abstract:     
Who is watching the financial services industry? Since 1980 there have been multiple waves of thought about whether the ministry of finance, the central bank, a specialized regulator, or some combination should have supervisory authority. These waves have been associated with convergence of actual practices. How much and through what channels did internationally promoted ideas about supervisory “best practice” influence institutional design choices? I use a new data set of 83 countries and jurisdictions between the 1980s and 2007 to examine the diffusion of supervisory ideas. With this data, I employ Cox Proportional Hazard and Competing Risks Event History Analyses to evaluate the possible causal roles best practice policy ideas may have played. I find that banking crises and certain peer groups can encourage policy convergence on heavily promoted ideas.

Number of Pages in PDF File: 37

Keywords: policy diffusion, event history analysis, financial

Accepted Paper Series