Scaling the Twin Peaks: Systemic Risk and Dual Regulation
14 Pages Posted: 29 Mar 2019 Last revised: 1 May 2019
Date Written: March 5, 2019
In April 2013, the UK implemented a dual-regulation approach to financial services often referred to as twin peaks. In this paper, we assess the impact of the introduction of twin peaks regulation on the systemic risk contributions of UK financial institutions. Using a matched sample of single- and dual-regulated financial institutions, we provide evidence that twin peaks regulation resulted in a relative reduction in systemic risk for dual-regulated firms.
Keywords: bank regulation, financial stability, regulatory model, systemic risk
JEL Classification: G21, G28
Suggested Citation: Suggested Citation