Institutional Setup and Banking Regulation: Evidence From Panel Data

25 Pages Posted: 26 May 2020

See all articles by Joseph Attila

Joseph Attila

Univ. Artois, Univ. UPJV, UR 4286, Laboratoire LEFMI, Amiens, France

Maxence Miéra

Artois University; LEM-CNRS, (UMR 9221)

Date Written: October 1, 2019

Abstract

In this paper, we study the effects of different institutional setups on banking regulation and supervision. In-depth econometric analyses are carried out on panel data over the period 1975- 2005 on a large sample and account for the unobserved country-specific effects as well as time effects. Our results suggest strong evidence that both domestic and international institutions are significantly associated with banking regulation and supervision, though with differing impacts. Our analyses also show that democratic institutions negatively affect banking regulation, a result that suggests that such institutions might have a detrimental effect on the process of implementing effective banking supervision. Lastly, our results point to what can be called the “institutional paradox” of banking regulation and supervision in developed countries. These results emerge in both fixed-effects estimators and generalized method of moments (GMM) and are robust across different aspects of banking supervision.

Keywords: Institutions, Banking regulation, Financial stability.

JEL Classification: G21, G28

Suggested Citation

Attila, Joseph Gbewopo and Miéra, Maxence and Miéra, Maxence, Institutional Setup and Banking Regulation: Evidence From Panel Data (October 1, 2019). Available at SSRN: https://ssrn.com/abstract=3586324 or http://dx.doi.org/10.2139/ssrn.3586324

Joseph Gbewopo Attila (Contact Author)

Univ. Artois, Univ. UPJV, UR 4286, Laboratoire LEFMI, Amiens, France ( email )

France

Maxence Miéra

Artois University ( email )

9 Rue Temple
Arras, Pas de Calais 62000
France

LEM-CNRS, (UMR 9221) ( email )

Lille
France

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