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Regulatory capture and banking supervision reform

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  • Boyer, Pierre C.
  • Ponce, Jorge

Abstract

We analyze whether banking supervision responsibilities should be concentrated in the hands of a single supervisor. We find that splitting supervisory powers among different supervisors is a superior arrangement in terms of social welfare to concentrating them in a single supervisor when the capture of supervisors by bankers is a concern. This result has implications for the design of banking supervisory architecture and informs current reform efforts in this field.

Suggested Citation

  • Boyer, Pierre C. & Ponce, Jorge, 2012. "Regulatory capture and banking supervision reform," Journal of Financial Stability, Elsevier, vol. 8(3), pages 206-217.
    • Handle: RePEc:eee:finsta:v:8:y:2012:i:3:p:206-217
    DOI: 10.1016/j.jfs.2011.07.002
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    More about this item

    Keywords

    Prudential supervision; Regulatory capture; Banking supervision reform; Financial supervision architecture;
    All these keywords.

    JEL classification:

    • D42 - Microeconomics - - Market Structure, Pricing, and Design - - - Monopoly
    • G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage

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