Central Banking, Macroprudential Supervision and Insurance

38 Pages Posted: 7 Feb 2014 Last revised: 17 Apr 2014

See all articles by Donato Masciandaro

Donato Masciandaro

Bocconi University - Department of Economics; Bocconi University - Department of Economics (ECO)

Alessio Volpicella

Queen Mary University of London, School of Economics and Finance; Queen Mary University of London, School of Economics and Finance

Date Written: February 1, 2014

Abstract

This paper offers a positive analysis of the relationships between central banking, macro prudential supervision and insurance, presenting three contributions. Starting from the review of the recent theoretical models, which directly or indirectly take the issue of the central bank involvement in macro supervision, it has been discovered that two relevant topics are missed: the political economy of the macro supervisory architecture design and the role of the insurance interconnectedness. Therefore a principal agent model is used to design a political economy framework, which explains how the politicians can shape the central bank governance in addressing systemic risks in insurance. Finally, the framework is used to analyse the present institutional settings in 39 countries.

Keywords: Central Banking, Macro Prudential Supervision, Insurance Interconnectedness, Political Economy, Principal Agent.

JEL Classification: E31, E52, E58, E62

Suggested Citation

Masciandaro, Donato and Volpicella, Alessio and Volpicella, Alessio, Central Banking, Macroprudential Supervision and Insurance (February 1, 2014). Baffi Center Research Paper No. 2014-150, Available at SSRN: https://ssrn.com/abstract=2392349 or http://dx.doi.org/10.2139/ssrn.2392349

Donato Masciandaro (Contact Author)

Bocconi University - Department of Economics ( email )

Via Gobbi 5
Milan, 20136
Italy

Bocconi University - Department of Economics (ECO) ( email )

Via Gobbi 5
Milan, 20136
Italy

Alessio Volpicella

Queen Mary University of London, School of Economics and Finance ( email )

Mile End Road
London, London E1 4NS
United Kingdom

Queen Mary University of London, School of Economics and Finance ( email )

Mile End Road
Graduate Center
London, London E14NS
United Kingdom

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