Financial Supervision Arrangements: Experience And Perspectives

The surveillance of financial markets has always been a preoccupation of decision makers, but the present crisis requires a reconsideration of former arrangements in order to deal with vulnerabilities and contagion. Traditionally, separate authorities ensured the supervision of banks, capital markets, insurance companies, given their rather small scale activity and specificities. But, the ongoing changes concerning the portfolio of financial products that have occurred during the last two decades have strengthened the connections among financial institutions. The paper analyses the manner The Bank of England and The European Central Bank have reconsidered the architecture of the regulatory and supervisory system to meet the challenges raised by the recent crisis. The main conclusion of the study is that there is no one size fits all supervising system and that its architecture depends on the specific financial history of a country, its economic development, culture, the concentration and openness of their financial systems.