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Cooperation Among Eu Banking Supervisory Authorities: A Game Model

Author

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  • MIROSLAV NEDELCHEV

    (Economic Research Institute, Bulgarian Academy of Sciences)

Abstract

The aim of the paper is carrying out of survey for cooperation among banking supervisors based on the model of cooperative games. The initial measures of supervisors are aimed at rescuing the banking assets in their territory and to reduce losses to local taxpayers. The new reality demands these measures also to take into account the effects on other countries, and the need for cooperation among banking supervisors through ex-ante engagements for sharing ex-post costs. The results of paper show that the original measures to reduce the effects of global crisis have triggered short-term stabilization of the banking system at predominance of national interests. Using game theory for cooperation among banking supervisors leads to optimization of outcome for all countries participating in the ex-ante engagements. From the concrete case for a Bulgarian bank, part of an EU banking group, we have concluded that cooperation among more than two supervisors is recommended depending on the structure of the banking group.

Suggested Citation

  • Miroslav Nedelchev, 2018. "Cooperation Among Eu Banking Supervisory Authorities: A Game Model," Economics and Management, Faculty of Economics, SOUTH-WEST UNIVERSITY "NEOFIT RILSKI", BLAGOEVGRAD, vol. 14(2), pages 11-19.
    • Handle: RePEc:neo:journl:v:14:y:2018:i:2:p:11-19
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    References listed on IDEAS

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    1. Douglas W. Diamond & Philip H. Dybvig, 2000. "Bank runs, deposit insurance, and liquidity," Quarterly Review, Federal Reserve Bank of Minneapolis, vol. 24(Win), pages 14-23.
    2. Ms. María Nieto & Mr. Garry J. Schinasi, 2007. "EU Framework for Safeguarding Financial Stability: Towards an Analytical Benchmark for Assessing its Effectiveness," IMF Working Papers 2007/260, International Monetary Fund.
    3. Vítor Gaspar, 2010. "Financial Stability and Policy Cooperation," Working Papers o201001, Banco de Portugal, Economics and Research Department.
    4. Holthausen, Cornelia & Rønde, Thomas, 2004. "Cooperation in international banking supervision," Working Paper Series 316, European Central Bank.
    5. Miroslav Nedelchev, 2016. "New Framework Of Banking Supervision In The European Union," Entrepreneurship, Faculty of Economics, SOUTH-WEST UNIVERSITY "NEOFIT RILSKI", BLAGOEVGRAD, vol. 4(2), pages 287-300.
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    More about this item

    Keywords

    banking supervision; game theory; cooperative games;
    All these keywords.

    JEL classification:

    • C71 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Cooperative Games
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation

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