Will They Sing the Same Tune? Measuring Convergence in the New European System of Financial Supervisors

44 Pages Posted: 4 Aug 2009

See all articles by Donato Masciandaro

Donato Masciandaro

Bocconi University - Department of Economics

Marc Quintyn

International Monetary Fund (IMF)

Maria Jesus Nieto

Universidad Carlos III de Madrid - Management & Strategy Division

Date Written: July 2009

Abstract

In June 2009 a new financial supervisory framework for the European Union (EU) was endorsed, consisting of a macro- and a micro-prudential pillar. The latter is composed of a Steering Committee, a supranational layer and a network of national supervisory authorities at the bottom, de facto establishing a complex multiple principals-multiple agents network. This paper focuses on the network of national agencies. Starting from an analysis of supervisory architectures and governance arrangements, we assess to what extent lack of convergence could undermine efficient and effective supervision. The main conclusion is that harmonization of governance arrangements towards best practice would better align supervisors' incentive structures and, hence, be beneficial for the quality of supervision.

Keywords: Bank supervision, Banks, Budgetary policy, Central banks, Economic integration, European Union, Financial sector, Financial systems, Governance, Legislation, Monetary authorities, Transparency

Suggested Citation

Masciandaro, Donato and Quintyn, Marc and Nieto, María J., Will They Sing the Same Tune? Measuring Convergence in the New European System of Financial Supervisors (July 2009). IMF Working Paper No. 09/142, Available at SSRN: https://ssrn.com/abstract=1442244

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

María J. Nieto

Universidad Carlos III de Madrid - Management & Strategy Division ( email )

E-28903 Getafe (Madrid)
Spain

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