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Cross-Border Coordination of Prudential Supervision and Deposit Guarantees

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  • International Monetary Fund

Abstract

The scramble to expand deposit guarantees in Europe in response to recent financial turmoil confirms that the on-going integration of European financial markets requires closer coordination of prudential policies and financial safety nets. We study the optimal design of prudential supervision and deposit guarantee regulations in a multi-country, integrated banking market such as the European Union, where policy-makers have either similar or asymmetric preferences regarding profitability and stability of the banking sector. The paper concludes with recommendations on policy priorities in this area.

Suggested Citation

  • International Monetary Fund, 2008. "Cross-Border Coordination of Prudential Supervision and Deposit Guarantees," IMF Working Papers 2008/283, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:2008/283
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    References listed on IDEAS

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    1. Robert A. Eisenbeis & George G. Kaufman, 2006. "Challenges for Deposit Insurance and Financial Stability in Cross-Border Banking Environments with Emphasis on the European Union," World Scientific Book Chapters, in: Gerard Caprio Jr & Douglas D Evanoff & George G Kaufman (ed.), Cross-Border Banking Regulatory Challenges, chapter 22, pages 331-347, World Scientific Publishing Co. Pte. Ltd..
    2. Robert A. Eisenbeis, 2007. "Home Country Versus Cross-Border Negative Externalities in Large Banking Organization Failures and How to Avoid them," World Scientific Book Chapters, in: Douglas D Evanoff & George G Kaufman & John R LaBrosse (ed.), International Financial Instability Global Banking and National Regulation, chapter 13, pages 181-200, World Scientific Publishing Co. Pte. Ltd..
    3. Demirgüç-Kunt, Asli & Kane, Edward J. & Laeven, Luc, 2008. "Determinants of deposit-insurance adoption and design," Journal of Financial Intermediation, Elsevier, vol. 17(3), pages 407-438, July.
    4. 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.
    5. Gillian G. H. Garcia & Maria J. Nieto, 2007. "Preserving Financial Stability: A Dilemma For The European Union," Contemporary Economic Policy, Western Economic Association International, vol. 25(3), pages 444-458, July.
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    7. Barth,James R. & Caprio,Gerard & Levine,Ross, 2008. "Rethinking Bank Regulation," Cambridge Books, Cambridge University Press, number 9780521709309, September.
    8. Luc Laeven, 2004. "The Political Economy of Deposit Insurance," Journal of Financial Services Research, Springer;Western Finance Association, vol. 26(3), pages 201-224, December.
    9. Mr. David S. Hoelscher & Mr. Michael W Taylor & Mr. Ulrich H Klueh, 2006. "The Design and Implementation of Deposit Insurance Systems," IMF Occasional Papers 2006/006, International Monetary Fund.
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    11. Demirguc-Kunt, Asli & Huizinga, Harry, 2004. "Market discipline and deposit insurance," Journal of Monetary Economics, Elsevier, vol. 51(2), pages 375-399, March.
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    Cited by:

    1. Thomas Jobert & Alexandru Monahov & Anna Tykhonenko, 2014. "Domestic Credit in Times of Supervision: An Empirical Investigation of European Countries," GREDEG Working Papers 2014-30, Groupe de REcherche en Droit, Economie, Gestion (GREDEG CNRS), Université Côte d'Azur, France.
    2. International Monetary Fund, 2009. "A European Mandate for Financial Sector Supervisors in the EU," IMF Working Papers 2009/005, International Monetary Fund.
    3. Gillian G.H. Garcia & Rosa M. Lastra & María J. Nieto, 2009. "Bankruptcy and reorganization procedures for cross‐border banks in the EU," Journal of Financial Regulation and Compliance, Emerald Group Publishing Limited, vol. 17(3), pages 240-276, July.
    4. International Association of Deposit Insurers, 2011. "Cross Border Deposit Insurance Issues Raised by the Global Financial Crisis," IADI Research Papers 11-03, International Association of Deposit Insurers.
    5. Reza Siregar & Lim, C.S. Vincent, 2011. "Living with Macro-financial Linkages: Policy Perspectives and Challenges for SEACEN Countries," Staff Papers, South East Asian Central Banks (SEACEN) Research and Training Centre, number sp79, April.
    6. Maria J. Nieto & Gillian G. Garcia, 2012. "The insufficiency of traditional safety nets: what bank resolution fund for Europe?," Journal of Financial Regulation and Compliance, Emerald Group Publishing Limited, vol. 20(2), pages 116-146, May.

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    Keywords

    WP; deposit guarantee;

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