Scaling the Twin Peaks: Systemic Risk and Dual Regulation

14 Pages Posted: 29 Mar 2019 Last revised: 1 May 2019

See all articles by Thomas Conlon

Thomas Conlon

University College Dublin

Xing Huan

University of Warwick - Accounting Group

Date Written: March 5, 2019

Abstract

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

Conlon, Thomas and Huan, Xing, Scaling the Twin Peaks: Systemic Risk and Dual Regulation (March 5, 2019). Economics Letters, 2019. Available at SSRN: https://ssrn.com/abstract=3340174 or http://dx.doi.org/10.2139/ssrn.3340174

Thomas Conlon

University College Dublin ( email )

Smurfit Graduate Business School
Blackrock
Co. Dublin, n/a
Ireland

HOME PAGE: http://www.ucd.ie/bankingfinance/staff/drthomasconlon/

Xing Huan (Contact Author)

University of Warwick - Accounting Group ( email )

Warwick Business School
Coventry CV4 7AL
United Kingdom

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