The Governance of Financial Supervision: Recent Developments

25 Pages Posted: 28 Oct 2016

See all articles by Donato Masciandaro

Donato Masciandaro

Bocconi University - Department of Economics

Marc Quintyn

International Monetary Fund (IMF)

Date Written: December 2016

Abstract

This paper examines the evolution of financial supervision as a policy tool over the last three decades, with a focus on the issues raised by the Global Crisis. It considers a sample of advanced and emerging economies to discuss the four main questions debated in the literature, and addressed in the economic policy arena: the architecture of supervision, the role of the central bank as supervisor, the governance of supervision, and financial supervision vs. the internationalization of finance. Our survey finds that, on each of these issues, theory and practice do not offer clear‐cut answers and unambiguous optimal solutions. At the same time, the most promising approach is to tackle financial supervision as a principal‐agent problem, where economics and political economy approaches must be used in combination to improve both positive and normative analyses of supervisory governance.

Keywords: Central banking, Financial supervision, Global Crisis

Suggested Citation

Masciandaro, Donato and Quintyn, Marc, The Governance of Financial Supervision: Recent Developments (December 2016). Journal of Economic Surveys, Vol. 30, Issue 5, pp. 982-1006, 2016, Available at SSRN: https://ssrn.com/abstract=2860393 or http://dx.doi.org/10.1111/joes.12130

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

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