The Economics of Supranational Bank Supervision

46 Pages Posted: 6 Mar 2018  

Thorsten Beck

City University London - Sir John Cass Business School; Tilburg University - European Banking Center, CentER

Consuelo Silva Buston

Pontifical Catholic University of Chile - School of Business

Wolf Wagner

Erasmus University Rotterdam (EUR) - Rotterdam School of Management (RSM); Centre for Economic Policy Research (CEPR)

Multiple version iconThere are 2 versions of this paper

Date Written: February 22, 2018

Abstract

We document large variation in the propensity and the intensity in which countries cooperate in the supervision of banks. We show that these variations can be linked to differences in cooperation gains. Using hand-collected data on supranational agreements for 4,278 country pairs during the period 1995-2013, we find that proxies for bilateral cooperation gains a) increase the likelihood of cooperation, b) accelerate the adoption of cooperation, c) make intense forms of cooperation more likely. An analysis of regional cooperation shows that their make-up, as well as their evolution, is broadly consistent with predicted cooperation gains. Our findings suggests that a uniform approach to supranational supervision is not necessarily desirable as countries differ considerably in the extent to which they benefit from cooperation.

Keywords: Supranational supervisory cooperation; cross-border banking; externalities

JEL Classification: G1, G2

Suggested Citation

Beck, Thorsten and Silva Buston, Consuelo and Wagner, Wolf, The Economics of Supranational Bank Supervision (February 22, 2018). Available at SSRN: https://ssrn.com/abstract=3130124 or http://dx.doi.org/10.2139/ssrn.3130124

Thorsten Beck

City University London - Sir John Cass Business School ( email )

106 Bunhill Row
London, EC1Y 8TZ
United Kingdom

Tilburg University - European Banking Center, CentER ( email )

PO Box 90153
Tilburg, 5000 LE
Netherlands

Consuelo Silva Buston

Pontifical Catholic University of Chile - School of Business ( email )

Vicuna Mackenna 4860
Santiago
Chile

Wolf Wagner (Contact Author)

Erasmus University Rotterdam (EUR) - Rotterdam School of Management (RSM) ( email )

P.O. Box 1738
Room T08-21
3000 DR Rotterdam, 3000 DR
Netherlands

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

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