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http://ssrn.com/abstract=2185819
 
 

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Bank Regulation and Supervision Around the World: A Crisis Update


Martin Cihák


World Bank

Asli Demirgüç-Kunt


World Bank - Financial and Private Sector Development; World Bank

Maria Soledad Martinez Peria


World Bank - Development Research Group (DECRG)

Amin Mohseni-Cheraghlou


World Bank; American University

December 1, 2012

World Bank Policy Research Working Paper No. 6286

Abstract:     
This paper presents the latest update of the World Bank Bank Regulation and Supervision Survey, and explores two questions. First, were there significant differences in regulation and supervision between crisis and non-crisis countries? Second, what aspects of regulation and supervision changed significantly during the crisis period? The paper finds significant differences between crisis and non-crisis countries in several aspects of regulation and supervision. In particular, crisis countries (a) had less stringent definitions of capital and lower actual capital ratios, (b) faced fewer restrictions on non-bank activities, (c) were less strict in the regulatory treatment of bad loans and loan losses, and (d) had weaker incentives for the private sector to monitor banks' risks. Survey results also suggest that the overall regulatory response to the crisis has been slow, and there is room to improve regulation and supervision, as well as private incentives to monitor risk-taking. Specifically, comparing regulatory and supervisory practices before and after the global crisis, the paper finds relatively few changes: capital ratios increased (primarily among non-crisis countries), deposit insurance schemes became more generous, and some reforms were introduced in the area of bank governance and bank resolution.

Number of Pages in PDF File: 52

Keywords: Banks & Banking Reform, Access to Finance, Emerging Markets, Debt Markets, Bankruptcy and Resolution of Financial Distress

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Date posted: December 6, 2012  

Suggested Citation

Cihák, Martin and Demirgüç-Kunt, Asli and Martinez Peria, Maria Soledad and Mohseni-Cheraghlou, Amin, Bank Regulation and Supervision Around the World: A Crisis Update (December 1, 2012). World Bank Policy Research Working Paper No. 6286. Available at SSRN: http://ssrn.com/abstract=2185819

Contact Information

Martin Cihák (Contact Author)
World Bank ( email )
1818 H Street, NW
Washington, DC 20433
United States
Asli Demirgüç-Kunt
World Bank - Financial and Private Sector Development ( email )
United States
202-473-7479 (Phone)
202-522-1155 (Fax)
HOME PAGE: http://econ.worldbank.org/staff/ademirguckunt/
World Bank ( email )
1818 H Street, NW
Washington, DC 20433
United States
Maria Soledad Martinez Peria
World Bank - Development Research Group (DECRG) ( email )
1818 H. Street, N.W.
MSN3-311
Washington, DC 20433
United States
202-458-7341 (Phone)
202-522-1155 (Fax)
HOME PAGE: http://econ.worldbank.org/staff/smartinezperia
Amin Mohseni-Cheraghlou
World Bank ( email )
1818 H Street, NW
Washington, DC 20433
United States
American University ( email )
4400 Massachusetts Ave, NW
Washington, DC 20016
United States
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