Cross-Border Coordination of Prudential Supervision and Deposit Guarantees

28 Pages Posted: 18 Dec 2008

See all articles by Daniel Hardy

Daniel Hardy

International Monetary Fund (IMF)

Maria Nieto

Banco de España

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Date Written: December 2008


The scramble to expand deposit guarantees in Europe in response to recent financial turmoil confirms that the on-going integration of European financial markets requires closer coordination of prudential policies and financial safety nets. We study the optimal design of prudential supervision and deposit guarantee regulations in a multi-country, integrated banking market such as the European Union, where policy-makers have either similar or asymmetric preferences regarding profitability and stability of the banking sector. The paper concludes with recommendations on policy priorities in this area.

Keywords: Deposit insurance, Europe, European Economic and Monetary Union, Economic integration, Bank supervision, Banking sector, Social safety nets, International cooperation

Suggested Citation

Hardy, Daniel and Nieto, Maria J., Cross-Border Coordination of Prudential Supervision and Deposit Guarantees (December 2008). IMF Working Papers, Vol. , pp. 1-26, 2008. Available at SSRN:

Daniel Hardy (Contact Author)

International Monetary Fund (IMF) ( email )

700 19th Street NW
Washington, DC 20431
United States

Maria J. Nieto

Banco de España ( email )

Alcala 50
Madrid 28014

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