Banking Supervision: Quality and Governance

32 Pages Posted: 17 Apr 2007

See all articles by Marco Arnone

Marco Arnone

Centre for Macroeconomics & Finance Research (CeMaFiR); Catholic University of the Sacred Heart of Milan - Institute for Economic Policy

Salim M. Darbar

International Monetary Fund (IMF)

Alessandro Gambini

Bank of Italy; Università Politecnica delle Marche - Department of Economics and Money and Finance Research group (Mo.Fi.R.); Centre for Macroeconomics & Finance Research (CeMaFiR)

Date Written: April 2007

Abstract

This paper examines the relationship between the quality of banking supervision and governance of the supervisory agency, based on assessments of the Basel Core Principles and the IMF Code on Transparency in Financial Policies, covering 116 and 53 countries, respectively, with 51 common to both. We find a positive correlation between the transparency of the supervisor and the effectiveness of banking supervision; moreover, better accountability and integrity practices of the banking supervisors are associated with higher independence, which in turn is associated with better compliance with the Basel Core Principles. These results are largely robust to different stages of financial development.

JEL Classification: G21, G28, E58

Suggested Citation

Arnone, Marco and Darbar, Salim M. and Gambini, Alessandro, Banking Supervision: Quality and Governance (April 2007). IMF Working Paper No. 07/82, Available at SSRN: https://ssrn.com/abstract=980811

Marco Arnone

Centre for Macroeconomics & Finance Research (CeMaFiR) ( email )

Piazza Mirabello, 2
Milano, 20121
Italy

HOME PAGE: http://www.a-bpfoundation.org

Catholic University of the Sacred Heart of Milan - Institute for Economic Policy ( email )

Via Necchi, 5
20123 Milan
Italy
+39 02 72342921 (Phone)

Salim M. Darbar (Contact Author)

International Monetary Fund (IMF) ( email )

700 19th Street NW
Washington, DC 20431
United States

Alessandro Gambini

Bank of Italy ( email )

Via Nazionale 91
Rome, 00184
Italy

Università Politecnica delle Marche - Department of Economics and Money and Finance Research group (Mo.Fi.R.) ( email )

Piazzale Martelli 8
60121 Ancona
Italy
+39 0712207230 (Phone)

HOME PAGE: http://www.mofir.univpm.it

Centre for Macroeconomics & Finance Research (CeMaFiR) ( email )

Piazza Mirabello 2
Milano, 20100
Italy

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