Does Regulatory Governance Matter for Financial System Stability? An Empirical Analysis

44 Pages Posted: 15 Feb 2006

See all articles by Marc Quintyn

Marc Quintyn

International Monetary Fund (IMF)

Kina Chenard

affiliation not provided to SSRN

Date Written: May 2004

Abstract

This paper provides empirical evidence that the quality of regulatory governancegovernance practices adopted by financial system regulators and supervisorsmatters for financial system soundness. The paper constructs indices of financial system soundness and regulatory governance, based on country data collected from the Financial Sector Assessment Program (FSAP). Regression results indicate that regulatory governance has a significant influence on financial system soundness, along with variables reflecting macroeconomic conditions, the structure of the banking system, and the quality of political institutions and public sector governance. The results also indicate that good public sector governance amplifies the impact of regulatory governance on financial system soundness.

Keywords: Institutions, governance, financial regulation and supervision, financial stability

JEL Classification: 017, P16, G28, G21, D78

Suggested Citation

Quintyn, Marc and Chenard, Kina, Does Regulatory Governance Matter for Financial System Stability? An Empirical Analysis (May 2004). IMF Working Paper No. 04/89, Available at SSRN: https://ssrn.com/abstract=878912

Marc Quintyn

International Monetary Fund (IMF) ( email )

700 19th Street NW
Washington, DC 20431
United States

Kina Chenard

affiliation not provided to SSRN

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