Helping Hand or Grabbing Hand? Supervisory Architecture, Financial Structure and Market View

48 Pages Posted: 24 Mar 2008

See all articles by Donato Masciandaro

Donato Masciandaro

Bocconi University - Department of Economics

Marc Quintyn

International Monetary Fund (IMF)

Date Written: February 2008

Abstract

The literature stresses the importance of financial market characteristics in determining the supervisory architectures. In the real world it is not always clear to what extent market features are taken into account. We present two complementary approaches to gain insights in the above relationship. First, an empirical test of two theories-the helping and the grabbing hand view of government-seems more consistent with the latter, presuming the market demonstrates a preference for consolidation of supervisory powers. Second, a survey among financial CEOs in Italy confirms a preference for a consolidated supervisory regime and reveals only weak consistency between the views of the policymakers and the market operators.

Keywords: Capital markets, Italy, Bank supervision, Governance

Suggested Citation

Masciandaro, Donato and Quintyn, Marc, Helping Hand or Grabbing Hand? Supervisory Architecture, Financial Structure and Market View (February 2008). IMF Working Paper No. 08/47, Available at SSRN: https://ssrn.com/abstract=1112149

Donato Masciandaro (Contact Author)

Bocconi University - Department of Economics ( email )

Via Gobbi 5
Milan, 20136
Italy

Marc Quintyn

International Monetary Fund (IMF) ( email )

700 19th Street NW
Washington, DC 20431
United States

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