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Have more strictly regulated banking systems fared better during the recent financial crisis?

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  • Ahrend, Rudiger
  • Arnold, Jens
  • Murtin, Fabrice

Abstract

We assess whether during the recent financial crisis banking systems in countries with more stringent prudential banking regulation have proved more stable. We find indicators of regulatory strength to be relatively well correlated with the extent to which countries have escaped damage during the recent crisis, as measured either by the degree of equity value destruction in the banking sector or by the fiscal cost of financial sector rescue.

Suggested Citation

  • Ahrend, Rudiger & Arnold, Jens & Murtin, Fabrice, 2009. "Have more strictly regulated banking systems fared better during the recent financial crisis?," MPRA Paper 20135, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:20135
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    References listed on IDEAS

    as
    1. Rocco Huang & Mr. Lev Ratnovski, 2009. "Why Are Canadian Banks More Resilient?," IMF Working Papers 2009/152, International Monetary Fund.
    2. Rudiger Ahrend & Jens Matthias Arnold & Fabrice Murtin, 2009. "Prudential Regulation and Competition in Financial Markets," OECD Economics Department Working Papers 735, OECD Publishing.
    3. Ahrend, Rudiger, 2010. "Monetary ease: A factor behind financial crises? Some evidence from OECD countries," Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), Kiel Institute for the World Economy (IfW Kiel), vol. 4, pages 1-30.
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    Cited by:

    1. Zongo, Amara, 2020. "The Impact of Restrictive Measures on Bilateral FDI in OECD Countries," MPRA Paper 101929, University Library of Munich, Germany.
    2. Rudiger Ahrend & Antoine Goujard, 2012. "International Capital Mobility and Financial Fragility - Part 3. How Do Structural Policies Affect Financial Crisis Risk?: Evidence from Past Crises Across OECD and Emerging Economies," OECD Economics Department Working Papers 966, OECD Publishing.
    3. Mikhail Stolbov, 2015. "Anatomy of international banking crises at the onset of the Great Recession," International Economics and Economic Policy, Springer, vol. 12(4), pages 553-569, October.
    4. Rudiger Ahrend & Antoine Goujard & Cyrille Schwellnus, 2012. "International Capital Mobility: Which Structural Policies Reduce Financial Fragility?," OECD Economic Policy Papers 2, OECD Publishing.
    5. Rudiger Ahrend & Antoine Goujard, 2012. "International Capital Mobility and Financial Fragility - Part 1. Drivers of Systemic Banking Crises: The Role of Bank-Balance-Sheet Contagion and Financial Account Structure," OECD Economics Department Working Papers 902, OECD Publishing.
    6. Ahrend, Rudiger, 2010. "Monetary ease: A factor behind financial crises? Some evidence from OECD countries," Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), Kiel Institute for the World Economy (IfW Kiel), vol. 4, pages 1-30.
    7. Ahrend, Rudiger & Goujard, Antoine, 2015. "Global banking, global crises? The role of the bank balance-sheet channel for the transmission of financial crises," European Economic Review, Elsevier, vol. 80(C), pages 253-279.

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    More about this item

    Keywords

    Prudential regulation; banking; stability; financial crisis; crisis cost; banking sector bail-out; banking share prices.;
    All these keywords.

    JEL classification:

    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • G01 - Financial Economics - - General - - - Financial Crises
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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