Financial Supervision Regimes and Bank Efficiency: International Evidence

Posted: 21 Jun 2013

See all articles by Chrysovalantis Gaganis

Chrysovalantis Gaganis

University of Crete - Faculty of Social Sciences - Department of Economics

Fotios Pasiouras

GSCM-Montpellier Business School

Date Written: June 16, 2013

Abstract

There exists a lively debate as for the appropriate architecture of the financial supervision regime, with a long list of theoretical advantages and disadvantages associated with each one of its key dimensions. The present study investigates whether and how bank profit efficiency are influenced by the central bank’s involvement in financial supervision, the unification of financial authorities, and the independence of the central bank. The results show that efficiency decreases as the number of the financial sectors that are supervised by the central bank increases. Additionally, banks operating in countries with a lower number of financial supervisors are less profit efficient. Finally, central bank independence has a negative impact on bank profit efficiency.

Keywords: Central Bank, Efficiency, Independence, Supervision, Unification

JEL Classification: G21, G28

Suggested Citation

Gaganis, Chrysovalantis and Pasiouras, Fotios, Financial Supervision Regimes and Bank Efficiency: International Evidence (June 16, 2013). Journal of Banking and Finance, Forthcoming, Available at SSRN: https://ssrn.com/abstract=2280045

Chrysovalantis Gaganis (Contact Author)

University of Crete - Faculty of Social Sciences - Department of Economics ( email )

University Campus
Rethymno, Crete, 74100
Greece

HOME PAGE: http://economics.soc.uoc.gr/en/staff/4551/17

Fotios Pasiouras

GSCM-Montpellier Business School ( email )

2300, Avenue des Moulins
Montpellier, 34185
France

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