Placing Bank Supervision in the Central Bank
Although keeping bank supervision independent from macroprudential supervision may ensure more checks and balances, placing bank supervision in the central bank could exploit synergies with macroprudential supervision. This paper studies whether placing microprudential supervision of banks, typically the systemic part of the financial system, under the same roof as financial stability policy, typically entrusted to the central bank, can improve financial stability. Specifically, the paper analyzes whether having bank supervision in the central bank mitigated the likelihood of banking crises during 2007–12. The analysis conditions on crisis indicators commonly found in the early-warning models of banking crises, the quality of microprudential supervision, and the quality of macroprudential supervision. The authors find that countries with deeper financial markets and those undergoing rapid financial deepening can better foster financial stability when they put bank supervision in the central bank.
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dig-okr-10986221962024-08-07T20:24:24Z Placing Bank Supervision in the Central Bank Implications for Financial Stability Based on Evidence from the Global Crisis Melecky, Martin Podpiera, Anca Maria Melecky, Martin BANK NATIONALIZATIONS MONETARY POLICY DEPOSIT MICROSTRUCTURE CHECKS DEPOSITS PRUDENTIAL SUPERVISION BANK FOR INTERNATIONAL SETTLEMENTS FINANCIAL DEEPENING REAL INTEREST RATES MICRODATA SUPERVISORY AUTHORITY INTEREST CURRENCY CRISES GUARANTEES DEBT CRISIS FINANCIAL DISTRESS INTEREST RATE PRIVATE CREDIT EXCHANGE BALANCE OF PAYMENTS BANKING SYSTEM LIQUIDITY DEVELOPING COUNTRIES REAL INTEREST BANKING SYSTEMS POLITICAL ECONOMY HOUSING LIQUIDITY RISK MACROECONOMIC CONDITIONS LOAN BIS DUMMY VARIABLE SAVING RESERVE CENTRAL BANKS INFLATION INTERNATIONAL BANK LENDER CREDIBILITY CENTRAL BANK INFORMATION DISCLOSURE INTERNATIONAL FINANCE BANK REGULATION CURRENCY MORAL HAZARD RESERVE BANK LIQUIDATIONS INTEREST RATES MONETARY FUND EMERGING MARKET CRITERIA MARKETS DEBT FINANCIAL CRISES BANK RESTRUCTURING DEPOSIT INSURANCE INTERNATIONAL ECONOMICS LOANS REAL INTEREST RATE BANKING SECTORS BANK CREDIT GROSS DOMESTIC PRODUCT RULE OF LAW CRISIS COUNTRIES FINANCIAL SYSTEM SUPERVISORY POWERS FINANCE BANK POLICY BANKS SUPERVISORY AUTHORITIES EMERGING MARKETS CRISIS’ COUNTRIES FEDERAL RESERVE GOOD SYSTEMIC RISK ACCOUNTABILITY FEDERAL RESERVE BANK INTERNATIONAL FINANCIAL STATISTICS FINANCIAL STABILITY BANKING CRISIS BANK REGULATIONS FINANCIAL CRISIS FUTURE VALUE CURRENCY CRISIS BANK SYSTEMIC BANKING CRISES CREDIT CONFLICTS OF INTEREST LENDER OF LAST RESORT MACROECONOMICS PRICE STABILITY MANDATES PROPERTIES FINANCIAL REGULATION SHARES REAL EXCHANGE RATE MARKET DEFAULT LOCAL CURRENCY SUPERVISION OF BANKS CREDIT POLICIES BALANCE OF PAYMENT SOLVENCY CREDIT RISK MACROECONOMIC VARIABLES INSURANCE CURRENCY DEPRECIATION BANK PROFITS FINANCIAL DEVELOPMENT RISK DOMESTIC CREDIT SHARE FINANCIAL MARKETS BANKING POLITICAL STABILITY CAPITAL INFLOWS INSTITUTIONAL DEVELOPMENT BANK SUPERVISION CENTRAL BANKING RISK MANAGEMENT LENDING CHECK CREDIT GROWTH BANKING SUPERVISION EXCHANGE RATE MICROSTRUCTURES PROFITS BANKING CRISES FINANCIAL SYSTEMS GOVERNMENTS LIABILITIES BANKING STABILITY FINANCIAL OPENNESS INTERNATIONAL SETTLEMENTS NONPERFORMING LOANS Although keeping bank supervision independent from macroprudential supervision may ensure more checks and balances, placing bank supervision in the central bank could exploit synergies with macroprudential supervision. This paper studies whether placing microprudential supervision of banks, typically the systemic part of the financial system, under the same roof as financial stability policy, typically entrusted to the central bank, can improve financial stability. Specifically, the paper analyzes whether having bank supervision in the central bank mitigated the likelihood of banking crises during 2007–12. The analysis conditions on crisis indicators commonly found in the early-warning models of banking crises, the quality of microprudential supervision, and the quality of macroprudential supervision. The authors find that countries with deeper financial markets and those undergoing rapid financial deepening can better foster financial stability when they put bank supervision in the central bank. 2015-07-17T14:51:51Z 2015-07-17T14:51:51Z 2015-06 Working Paper Document de travail Documento de trabajo http://documents.worldbank.org/curated/en/2015/06/24680781/placing-bank-supervision-central-bank-implications-financial-stability-based-evidence-global-crisis https://hdl.handle.net/10986/22196 English en_US Policy Research Working Paper;No. 7320 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank application/pdf text/plain World Bank, Washington, DC |
| institution |
Banco Mundial |
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| country |
Estados Unidos |
| countrycode |
US |
| component |
Bibliográfico |
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En linea |
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dig-okr |
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biblioteca |
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America del Norte |
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Biblioteca del Banco Mundial |
| language |
English en_US |
| topic |
BANK NATIONALIZATIONS MONETARY POLICY DEPOSIT MICROSTRUCTURE CHECKS DEPOSITS PRUDENTIAL SUPERVISION BANK FOR INTERNATIONAL SETTLEMENTS FINANCIAL DEEPENING REAL INTEREST RATES MICRODATA SUPERVISORY AUTHORITY INTEREST CURRENCY CRISES GUARANTEES DEBT CRISIS FINANCIAL DISTRESS INTEREST RATE PRIVATE CREDIT EXCHANGE BALANCE OF PAYMENTS BANKING SYSTEM LIQUIDITY DEVELOPING COUNTRIES REAL INTEREST BANKING SYSTEMS POLITICAL ECONOMY HOUSING LIQUIDITY RISK MACROECONOMIC CONDITIONS LOAN BIS DUMMY VARIABLE SAVING RESERVE CENTRAL BANKS INFLATION INTERNATIONAL BANK LENDER CREDIBILITY CENTRAL BANK INFORMATION DISCLOSURE INTERNATIONAL FINANCE BANK REGULATION CURRENCY MORAL HAZARD RESERVE BANK LIQUIDATIONS INTEREST RATES MONETARY FUND EMERGING MARKET CRITERIA MARKETS DEBT FINANCIAL CRISES BANK RESTRUCTURING DEPOSIT INSURANCE INTERNATIONAL ECONOMICS LOANS REAL INTEREST RATE BANKING SECTORS BANK CREDIT GROSS DOMESTIC PRODUCT RULE OF LAW CRISIS COUNTRIES FINANCIAL SYSTEM SUPERVISORY POWERS FINANCE BANK POLICY BANKS SUPERVISORY AUTHORITIES EMERGING MARKETS CRISIS’ COUNTRIES FEDERAL RESERVE GOOD SYSTEMIC RISK ACCOUNTABILITY FEDERAL RESERVE BANK INTERNATIONAL FINANCIAL STATISTICS FINANCIAL STABILITY BANKING CRISIS BANK REGULATIONS FINANCIAL CRISIS FUTURE VALUE CURRENCY CRISIS BANK SYSTEMIC BANKING CRISES CREDIT CONFLICTS OF INTEREST LENDER OF LAST RESORT MACROECONOMICS PRICE STABILITY MANDATES PROPERTIES FINANCIAL REGULATION SHARES REAL EXCHANGE RATE MARKET DEFAULT LOCAL CURRENCY SUPERVISION OF BANKS CREDIT POLICIES BALANCE OF PAYMENT SOLVENCY CREDIT RISK MACROECONOMIC VARIABLES INSURANCE CURRENCY DEPRECIATION BANK PROFITS FINANCIAL DEVELOPMENT RISK DOMESTIC CREDIT SHARE FINANCIAL MARKETS BANKING POLITICAL STABILITY CAPITAL INFLOWS INSTITUTIONAL DEVELOPMENT BANK SUPERVISION CENTRAL BANKING RISK MANAGEMENT LENDING CHECK CREDIT GROWTH BANKING SUPERVISION EXCHANGE RATE MICROSTRUCTURES PROFITS BANKING CRISES FINANCIAL SYSTEMS GOVERNMENTS LIABILITIES BANKING STABILITY FINANCIAL OPENNESS INTERNATIONAL SETTLEMENTS NONPERFORMING LOANS BANK NATIONALIZATIONS MONETARY POLICY DEPOSIT MICROSTRUCTURE CHECKS DEPOSITS PRUDENTIAL SUPERVISION BANK FOR INTERNATIONAL SETTLEMENTS FINANCIAL DEEPENING REAL INTEREST RATES MICRODATA SUPERVISORY AUTHORITY INTEREST CURRENCY CRISES GUARANTEES DEBT CRISIS FINANCIAL DISTRESS INTEREST RATE PRIVATE CREDIT EXCHANGE BALANCE OF PAYMENTS BANKING SYSTEM LIQUIDITY DEVELOPING COUNTRIES REAL INTEREST BANKING SYSTEMS POLITICAL ECONOMY HOUSING LIQUIDITY RISK MACROECONOMIC CONDITIONS LOAN BIS DUMMY VARIABLE SAVING RESERVE CENTRAL BANKS INFLATION INTERNATIONAL BANK LENDER CREDIBILITY CENTRAL BANK INFORMATION DISCLOSURE INTERNATIONAL FINANCE BANK REGULATION CURRENCY MORAL HAZARD RESERVE BANK LIQUIDATIONS INTEREST RATES MONETARY FUND EMERGING MARKET CRITERIA MARKETS DEBT FINANCIAL CRISES BANK RESTRUCTURING DEPOSIT INSURANCE INTERNATIONAL ECONOMICS LOANS REAL INTEREST RATE BANKING SECTORS BANK CREDIT GROSS DOMESTIC PRODUCT RULE OF LAW CRISIS COUNTRIES FINANCIAL SYSTEM SUPERVISORY POWERS FINANCE BANK POLICY BANKS SUPERVISORY AUTHORITIES EMERGING MARKETS CRISIS’ COUNTRIES FEDERAL RESERVE GOOD SYSTEMIC RISK ACCOUNTABILITY FEDERAL RESERVE BANK INTERNATIONAL FINANCIAL STATISTICS FINANCIAL STABILITY BANKING CRISIS BANK REGULATIONS FINANCIAL CRISIS FUTURE VALUE CURRENCY CRISIS BANK SYSTEMIC BANKING CRISES CREDIT CONFLICTS OF INTEREST LENDER OF LAST RESORT MACROECONOMICS PRICE STABILITY MANDATES PROPERTIES FINANCIAL REGULATION SHARES REAL EXCHANGE RATE MARKET DEFAULT LOCAL CURRENCY SUPERVISION OF BANKS CREDIT POLICIES BALANCE OF PAYMENT SOLVENCY CREDIT RISK MACROECONOMIC VARIABLES INSURANCE CURRENCY DEPRECIATION BANK PROFITS FINANCIAL DEVELOPMENT RISK DOMESTIC CREDIT SHARE FINANCIAL MARKETS BANKING POLITICAL STABILITY CAPITAL INFLOWS INSTITUTIONAL DEVELOPMENT BANK SUPERVISION CENTRAL BANKING RISK MANAGEMENT LENDING CHECK CREDIT GROWTH BANKING SUPERVISION EXCHANGE RATE MICROSTRUCTURES PROFITS BANKING CRISES FINANCIAL SYSTEMS GOVERNMENTS LIABILITIES BANKING STABILITY FINANCIAL OPENNESS INTERNATIONAL SETTLEMENTS NONPERFORMING LOANS |
| spellingShingle |
BANK NATIONALIZATIONS MONETARY POLICY DEPOSIT MICROSTRUCTURE CHECKS DEPOSITS PRUDENTIAL SUPERVISION BANK FOR INTERNATIONAL SETTLEMENTS FINANCIAL DEEPENING REAL INTEREST RATES MICRODATA SUPERVISORY AUTHORITY INTEREST CURRENCY CRISES GUARANTEES DEBT CRISIS FINANCIAL DISTRESS INTEREST RATE PRIVATE CREDIT EXCHANGE BALANCE OF PAYMENTS BANKING SYSTEM LIQUIDITY DEVELOPING COUNTRIES REAL INTEREST BANKING SYSTEMS POLITICAL ECONOMY HOUSING LIQUIDITY RISK MACROECONOMIC CONDITIONS LOAN BIS DUMMY VARIABLE SAVING RESERVE CENTRAL BANKS INFLATION INTERNATIONAL BANK LENDER CREDIBILITY CENTRAL BANK INFORMATION DISCLOSURE INTERNATIONAL FINANCE BANK REGULATION CURRENCY MORAL HAZARD RESERVE BANK LIQUIDATIONS INTEREST RATES MONETARY FUND EMERGING MARKET CRITERIA MARKETS DEBT FINANCIAL CRISES BANK RESTRUCTURING DEPOSIT INSURANCE INTERNATIONAL ECONOMICS LOANS REAL INTEREST RATE BANKING SECTORS BANK CREDIT GROSS DOMESTIC PRODUCT RULE OF LAW CRISIS COUNTRIES FINANCIAL SYSTEM SUPERVISORY POWERS FINANCE BANK POLICY BANKS SUPERVISORY AUTHORITIES EMERGING MARKETS CRISIS’ COUNTRIES FEDERAL RESERVE GOOD SYSTEMIC RISK ACCOUNTABILITY FEDERAL RESERVE BANK INTERNATIONAL FINANCIAL STATISTICS FINANCIAL STABILITY BANKING CRISIS BANK REGULATIONS FINANCIAL CRISIS FUTURE VALUE CURRENCY CRISIS BANK SYSTEMIC BANKING CRISES CREDIT CONFLICTS OF INTEREST LENDER OF LAST RESORT MACROECONOMICS PRICE STABILITY MANDATES PROPERTIES FINANCIAL REGULATION SHARES REAL EXCHANGE RATE MARKET DEFAULT LOCAL CURRENCY SUPERVISION OF BANKS CREDIT POLICIES BALANCE OF PAYMENT SOLVENCY CREDIT RISK MACROECONOMIC VARIABLES INSURANCE CURRENCY DEPRECIATION BANK PROFITS FINANCIAL DEVELOPMENT RISK DOMESTIC CREDIT SHARE FINANCIAL MARKETS BANKING POLITICAL STABILITY CAPITAL INFLOWS INSTITUTIONAL DEVELOPMENT BANK SUPERVISION CENTRAL BANKING RISK MANAGEMENT LENDING CHECK CREDIT GROWTH BANKING SUPERVISION EXCHANGE RATE MICROSTRUCTURES PROFITS BANKING CRISES FINANCIAL SYSTEMS GOVERNMENTS LIABILITIES BANKING STABILITY FINANCIAL OPENNESS INTERNATIONAL SETTLEMENTS NONPERFORMING LOANS BANK NATIONALIZATIONS MONETARY POLICY DEPOSIT MICROSTRUCTURE CHECKS DEPOSITS PRUDENTIAL SUPERVISION BANK FOR INTERNATIONAL SETTLEMENTS FINANCIAL DEEPENING REAL INTEREST RATES MICRODATA SUPERVISORY AUTHORITY INTEREST CURRENCY CRISES GUARANTEES DEBT CRISIS FINANCIAL DISTRESS INTEREST RATE PRIVATE CREDIT EXCHANGE BALANCE OF PAYMENTS BANKING SYSTEM LIQUIDITY DEVELOPING COUNTRIES REAL INTEREST BANKING SYSTEMS POLITICAL ECONOMY HOUSING LIQUIDITY RISK MACROECONOMIC CONDITIONS LOAN BIS DUMMY VARIABLE SAVING RESERVE CENTRAL BANKS INFLATION INTERNATIONAL BANK LENDER CREDIBILITY CENTRAL BANK INFORMATION DISCLOSURE INTERNATIONAL FINANCE BANK REGULATION CURRENCY MORAL HAZARD RESERVE BANK LIQUIDATIONS INTEREST RATES MONETARY FUND EMERGING MARKET CRITERIA MARKETS DEBT FINANCIAL CRISES BANK RESTRUCTURING DEPOSIT INSURANCE INTERNATIONAL ECONOMICS LOANS REAL INTEREST RATE BANKING SECTORS BANK CREDIT GROSS DOMESTIC PRODUCT RULE OF LAW CRISIS COUNTRIES FINANCIAL SYSTEM SUPERVISORY POWERS FINANCE BANK POLICY BANKS SUPERVISORY AUTHORITIES EMERGING MARKETS CRISIS’ COUNTRIES FEDERAL RESERVE GOOD SYSTEMIC RISK ACCOUNTABILITY FEDERAL RESERVE BANK INTERNATIONAL FINANCIAL STATISTICS FINANCIAL STABILITY BANKING CRISIS BANK REGULATIONS FINANCIAL CRISIS FUTURE VALUE CURRENCY CRISIS BANK SYSTEMIC BANKING CRISES CREDIT CONFLICTS OF INTEREST LENDER OF LAST RESORT MACROECONOMICS PRICE STABILITY MANDATES PROPERTIES FINANCIAL REGULATION SHARES REAL EXCHANGE RATE MARKET DEFAULT LOCAL CURRENCY SUPERVISION OF BANKS CREDIT POLICIES BALANCE OF PAYMENT SOLVENCY CREDIT RISK MACROECONOMIC VARIABLES INSURANCE CURRENCY DEPRECIATION BANK PROFITS FINANCIAL DEVELOPMENT RISK DOMESTIC CREDIT SHARE FINANCIAL MARKETS BANKING POLITICAL STABILITY CAPITAL INFLOWS INSTITUTIONAL DEVELOPMENT BANK SUPERVISION CENTRAL BANKING RISK MANAGEMENT LENDING CHECK CREDIT GROWTH BANKING SUPERVISION EXCHANGE RATE MICROSTRUCTURES PROFITS BANKING CRISES FINANCIAL SYSTEMS GOVERNMENTS LIABILITIES BANKING STABILITY FINANCIAL OPENNESS INTERNATIONAL SETTLEMENTS NONPERFORMING LOANS Melecky, Martin Podpiera, Anca Maria Melecky, Martin Placing Bank Supervision in the Central Bank |
| description |
Although keeping bank supervision
independent from macroprudential supervision may ensure more
checks and balances, placing bank supervision in the central
bank could exploit synergies with macroprudential
supervision. This paper studies whether placing
microprudential supervision of banks, typically the systemic
part of the financial system, under the same roof as
financial stability policy, typically entrusted to the
central bank, can improve financial stability. Specifically,
the paper analyzes whether having bank supervision in the
central bank mitigated the likelihood of banking crises
during 2007–12. The analysis conditions on crisis indicators
commonly found in the early-warning models of banking
crises, the quality of microprudential supervision, and the
quality of macroprudential supervision. The authors find
that countries with deeper financial markets and those
undergoing rapid financial deepening can better foster
financial stability when they put bank supervision in the
central bank. |
| format |
Working Paper |
| topic_facet |
BANK NATIONALIZATIONS MONETARY POLICY DEPOSIT MICROSTRUCTURE CHECKS DEPOSITS PRUDENTIAL SUPERVISION BANK FOR INTERNATIONAL SETTLEMENTS FINANCIAL DEEPENING REAL INTEREST RATES MICRODATA SUPERVISORY AUTHORITY INTEREST CURRENCY CRISES GUARANTEES DEBT CRISIS FINANCIAL DISTRESS INTEREST RATE PRIVATE CREDIT EXCHANGE BALANCE OF PAYMENTS BANKING SYSTEM LIQUIDITY DEVELOPING COUNTRIES REAL INTEREST BANKING SYSTEMS POLITICAL ECONOMY HOUSING LIQUIDITY RISK MACROECONOMIC CONDITIONS LOAN BIS DUMMY VARIABLE SAVING RESERVE CENTRAL BANKS INFLATION INTERNATIONAL BANK LENDER CREDIBILITY CENTRAL BANK INFORMATION DISCLOSURE INTERNATIONAL FINANCE BANK REGULATION CURRENCY MORAL HAZARD RESERVE BANK LIQUIDATIONS INTEREST RATES MONETARY FUND EMERGING MARKET CRITERIA MARKETS DEBT FINANCIAL CRISES BANK RESTRUCTURING DEPOSIT INSURANCE INTERNATIONAL ECONOMICS LOANS REAL INTEREST RATE BANKING SECTORS BANK CREDIT GROSS DOMESTIC PRODUCT RULE OF LAW CRISIS COUNTRIES FINANCIAL SYSTEM SUPERVISORY POWERS FINANCE BANK POLICY BANKS SUPERVISORY AUTHORITIES EMERGING MARKETS CRISIS’ COUNTRIES FEDERAL RESERVE GOOD SYSTEMIC RISK ACCOUNTABILITY FEDERAL RESERVE BANK INTERNATIONAL FINANCIAL STATISTICS FINANCIAL STABILITY BANKING CRISIS BANK REGULATIONS FINANCIAL CRISIS FUTURE VALUE CURRENCY CRISIS BANK SYSTEMIC BANKING CRISES CREDIT CONFLICTS OF INTEREST LENDER OF LAST RESORT MACROECONOMICS PRICE STABILITY MANDATES PROPERTIES FINANCIAL REGULATION SHARES REAL EXCHANGE RATE MARKET DEFAULT LOCAL CURRENCY SUPERVISION OF BANKS CREDIT POLICIES BALANCE OF PAYMENT SOLVENCY CREDIT RISK MACROECONOMIC VARIABLES INSURANCE CURRENCY DEPRECIATION BANK PROFITS FINANCIAL DEVELOPMENT RISK DOMESTIC CREDIT SHARE FINANCIAL MARKETS BANKING POLITICAL STABILITY CAPITAL INFLOWS INSTITUTIONAL DEVELOPMENT BANK SUPERVISION CENTRAL BANKING RISK MANAGEMENT LENDING CHECK CREDIT GROWTH BANKING SUPERVISION EXCHANGE RATE MICROSTRUCTURES PROFITS BANKING CRISES FINANCIAL SYSTEMS GOVERNMENTS LIABILITIES BANKING STABILITY FINANCIAL OPENNESS INTERNATIONAL SETTLEMENTS NONPERFORMING LOANS |
| author |
Melecky, Martin Podpiera, Anca Maria Melecky, Martin |
| author_facet |
Melecky, Martin Podpiera, Anca Maria Melecky, Martin |
| author_sort |
Melecky, Martin |
| title |
Placing Bank Supervision in the Central Bank |
| title_short |
Placing Bank Supervision in the Central Bank |
| title_full |
Placing Bank Supervision in the Central Bank |
| title_fullStr |
Placing Bank Supervision in the Central Bank |
| title_full_unstemmed |
Placing Bank Supervision in the Central Bank |
| title_sort |
placing bank supervision in the central bank |
| publisher |
World Bank, Washington, DC |
| publishDate |
2015-06 |
| url |
http://documents.worldbank.org/curated/en/2015/06/24680781/placing-bank-supervision-central-bank-implications-financial-stability-based-evidence-global-crisis https://hdl.handle.net/10986/22196 |
| work_keys_str_mv |
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| _version_ |
1807159603153076224 |