Institutional Design for Financial Market Supervision: The Choice for National Systems

27 Pages Posted: 17 Apr 2014 Last revised: 28 Apr 2014

See all articles by Eilis Ferran

Eilis Ferran

University of Cambridge - Faculty of Law; European Corporate Governance Institute (ECGI)

Date Written: April 15, 2014

Abstract

Countries aspire to have a competitive financial system that is consistent with financial stability, inspires public confidence, and has the capacity to meet the needs of users and to foster growth in the real economy. This paper, which has been written for the Handbook on Financial Regulation (Moloney, Ferran and Payne (eds) OUP, 2014) surveys the academic and policy debate on key issues that are relevant to the task of designing supervisory institutions to contribute to the achievement of these goals. The paper considers: the main supervisory models identified in the literature and in operation in practice in selected jurisdictions; the public character of supervision and the role of self-regulation; the role of the central bank in financial supervision; supervisory mandates and powers; supervisory accountability, governance and transparency; and supervisory costs and funding models. The paper shows that design choices can make a difference to supervisory and economic outcomes, but also that there is no single "right" or "wrong" institutional model for financial supervision, and that strong (and weak) financial supervision can come in a variety of packages.

Keywords: financial sector, supervision, institutional models, supervisory agencies, central banks

JEL Classification: G18, G28, K23, l50

Suggested Citation

Ferran, Eilis, Institutional Design for Financial Market Supervision: The Choice for National Systems (April 15, 2014). University of Cambridge Faculty of Law Research Paper No. 28/2014. Available at SSRN: https://ssrn.com/abstract=2425177 or http://dx.doi.org/10.2139/ssrn.2425177

Eilis Ferran (Contact Author)

University of Cambridge - Faculty of Law ( email )

10 West Road
Cambridge CB3 9DZ
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+ 44 1223 338335 (Phone)
+ 44 1223 338340 (Fax)

European Corporate Governance Institute (ECGI)

c/o ECARES ULB CP 114
B-1050 Brussels
Belgium

HOME PAGE: http://www.ecgi.org

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