Is One Watchdog Better than Three?: International Experience with Integrated Financial Sector Supervision

32 Pages Posted: 26 Apr 2006

See all articles by Richard Podpiera

Richard Podpiera

International Monetary Fund (IMF); Charles University in Prague - CERGE-EI (Center for Economic Research and Graduate Education - Economics Institute)

Martin Čihák

International Monetary Fund (IMF)

Date Written: March 2006

Abstract

Over the past two decades, there has been a clear trend toward integrating the regulation and supervision of banks, nonbank financial institutions, and securities markets. This paper reviews the international experience with integrated supervision. We survey the theoretical arguments for and against the integrated supervisory model, and use data on compliance with international standards to assess the validity of some of these arguments. We find that (i) full integration is associated with higher quality of supervision in insurance and securities and greater consistency of supervision across sectors, after controlling for the level of development; and (ii) fully integrated supervision is not associated with a significant reduction in supervisory staff.

Keywords: financial sector, financial services regulation, prudential supervision, supervisory agencies, integrated supervision

JEL Classification: G18, G28, K20, L50

Suggested Citation

Podpiera, Richard and Cihak, Martin, Is One Watchdog Better than Three?: International Experience with Integrated Financial Sector Supervision (March 2006). IMF Working Paper, Vol. , pp. 1-32, 2006. Available at SSRN: https://ssrn.com/abstract=892948

Richard Podpiera

International Monetary Fund (IMF) ( email )

700 19th Street NW
Washington, DC 20431
United States

Charles University in Prague - CERGE-EI (Center for Economic Research and Graduate Education - Economics Institute) ( email )

P.O. Box 882
7 Politickych veznu
Prague 1, 111 21
Czech Republic
+42 02 240 05 242 (Phone)
+42 02 242 27 143 (Fax)

HOME PAGE: http://www.cerge-ei.cz

Martin Cihak (Contact Author)

International Monetary Fund (IMF) ( email )

700 19th Street N.W.
Washington, DC 20431
United States

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