International Versus Domestic Auditing of Bank Solvency

Posted: 28 Aug 2005

See all articles by Andrew Feltenstein

Andrew Feltenstein

Georgia State University - Department of Economics

Roger Lagunoff

Georgetown University - Department of Economics

Multiple version iconThere are 2 versions of this paper

Abstract

This paper examines alternative ways to prevent losses from bank insolvencies. We develop a model that compares two alternative institutions for bank auditing. The first is a system of central bank auditing of national banks. The second is carried out by an international agency that collects and disseminates risk information on banks in all countries. The international auditor is shown to perform at least as well, and sometimes better than, auditing by either central banks or voluntary disclosure by the banks themselves in preventing losses. The international auditor's credibility comes from the fact that its incentives are not distorted by a sovereignty bias.

Keywords: Bank insolvency, Auditing, International auditing

JEL Classification: G10, G21, G28, M41, M45, M49

Suggested Citation

Feltenstein, Andrew and Lagunoff, Roger, International Versus Domestic Auditing of Bank Solvency. Journal of International Economics, Vol. 67, pp. 73-96, 2005, Available at SSRN: https://ssrn.com/abstract=786647

Andrew Feltenstein (Contact Author)

Georgia State University - Department of Economics ( email )

P.O. Box 3992
Atlanta, GA 30302-3992
United States
404-4130093 (Phone)

Roger Lagunoff

Georgetown University - Department of Economics ( email )

Washington, DC 20057
United States
202-687-1510 (Phone)
202-687-6102 (Fax)

Do you have negative results from your research you’d like to share?

Paper statistics

Abstract Views
970
PlumX Metrics