Download this Paper Open PDF in Browser

Bank Regulation and Supervision Around the World: A Crisis Update

52 Pages Posted: 20 Apr 2016  

Martin Čihák

International Monetary Fund (IMF)

Asli Demirgüç-Kunt

World Bank - Development Research Group; World Bank

Maria Soledad Martinez Peria

International Monetary Fund (IMF)

Amin Mohseni-Cheraghlou

World Bank; American University

Date Written: December 1, 2012

Abstract

This paper presents the latest update of the World Bank Bank Regulation and Supervision Survey, and explores two questions. First, were there significant differences in regulation and supervision between crisis and non-crisis countries? Second, what aspects of regulation and supervision changed significantly during the crisis period? The paper finds significant differences between crisis and non-crisis countries in several aspects of regulation and supervision. In particular, crisis countries (a) had less stringent definitions of capital and lower actual capital ratios, (b) faced fewer restrictions on non-bank activities, (c) were less strict in the regulatory treatment of bad loans and loan losses, and (d) had weaker incentives for the private sector to monitor banks' risks. Survey results also suggest that the overall regulatory response to the crisis has been slow, and there is room to improve regulation and supervision, as well as private incentives to monitor risk-taking. Specifically, comparing regulatory and supervisory practices before and after the global crisis, the paper finds relatively few changes: capital ratios increased (primarily among non-crisis countries), deposit insurance schemes became more generous, and some reforms were introduced in the area of bank governance and bank resolution.

Keywords: Banks & Banking Reform, Access to Finance, Emerging Markets, Debt Markets, Bankruptcy and Resolution of Financial Distress

Suggested Citation

Čihák, Martin and Demirgüç-Kunt, Asli and Martinez Peria, Maria Soledad and Mohseni-Cheraghlou, Amin, Bank Regulation and Supervision Around the World: A Crisis Update (December 1, 2012). World Bank Policy Research Working Paper No. 6286. Available at SSRN: https://ssrn.com/abstract=2185819

Martin Cihak (Contact Author)

International Monetary Fund (IMF) ( email )

700 19th Street N.W.
Washington, DC 20431
United States

Asli Demirgüç-Kunt

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

Maria Soledad Martinez Peria

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Amin Mohseni-Cheraghlou

World Bank ( email )

1818 H Street, NW
Washington, DC 20433
United States

American University ( email )

4400 Massachusetts Ave, NW
Washington, DC 20016
United States

Paper statistics

Downloads
675
Rank
30,965
Abstract Views
2,471