The Economic Crisis: Did Financial Supervision Matter?

48 Pages Posted: 19 Nov 2011

See all articles by Donato Masciandaro

Donato Masciandaro

Bocconi University - Department of Economics

Rosaria Vega Pansini

affiliation not provided to SSRN

Marc Quintyn

International Monetary Fund (IMF)

Date Written: November 2011

Abstract

The Asian financial crisis marked the beginning of worldwide efforts to improve the effectiveness of financial supervision. However, the crisis that started in 2007–08 was a crude awakening: several of these improvements seemed unable to avoid or mitigate the crisis. This paper brings the first systematic analysis of the role of two of these efforts - modifications in the architecture of financial supervision and in supervisory governance - and concludes that they were negatively correlated with economic resilience. Using the emerging distinction between macro- and micro-prudential supervision, we explore to what extent two separate institutions would allow for more checks and balances to improve supervisory governance and, thus, reduce the probability of supervisory failure.

Keywords: Asia, Bank supervision, Banks, Central bank role, Cross country analysis, Financial crisis, Financial sector

Suggested Citation

Masciandaro, Donato and Vega Pansini, Rosaria and Quintyn, Marc, The Economic Crisis: Did Financial Supervision Matter? (November 2011). IMF Working Paper No. 11/261, Available at SSRN: https://ssrn.com/abstract=1961908

Donato Masciandaro (Contact Author)

Bocconi University - Department of Economics ( email )

Via Gobbi 5
Milan, 20136
Italy

Rosaria Vega Pansini

affiliation not provided to SSRN

No Address Available

Marc Quintyn

International Monetary Fund (IMF) ( email )

700 19th Street NW
Washington, DC 20431
United States

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