Basel Core Principles and Bank Soundness: Does Compliance Matter?

32 Pages Posted: 20 Apr 2016  

Asli Demirgüç-Kunt

World Bank - Development Research Group; World Bank

Enrica Detragiache

International Monetary Fund (IMF) - European Department

Date Written: November 1, 2009

Abstract

This paper studies whether compliance with the Basel Core Principles for effective banking supervision is associated with bank soundness. Using data for more than 3,000 banks in 86 countries, the authors find that neither the overall index of compliance with the Basel Core Principles nor the individual components of the index are robustly associated with bank risk measured by Z-scores. The results of the analysis cast doubt on the usefulness of the Basel Core Principles in ensuring bank soundness.

Keywords: Banks & Banking Reform, Public Sector Corruption & Anticorruption Measures, Financial Intermediation, Debt Markets, Hazard Risk Management

Suggested Citation

Demirgüç-Kunt, Asli and Detragiache, Enrica, Basel Core Principles and Bank Soundness: Does Compliance Matter? (November 1, 2009). World Bank Policy Research Working Paper Series, Vol. , pp. -, 2009. Available at SSRN: https://ssrn.com/abstract=1509196

Asli Demirgüç-Kunt (Contact Author)

World Bank - Development Research Group ( 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

Enrica Detragiache

International Monetary Fund (IMF) - European Department ( email )

700 19th Street NW
Washington, DC 20431
United States

Paper statistics

Downloads
188
Rank
131,228
Abstract Views
974