Determinants of Financial Supervision Regimes: Markets, Institutions, Politics, Law or Geography?

70 Pages Posted: 13 Jan 2007

See all articles by Donato Masciandaro

Donato Masciandaro

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

Date Written: December 2006

Abstract

This paper assesses the determinants of the recent wave of financial supervision reforms, reviewing six different views concerning the determinants of financial supervision architectures: economic view, market view, law view, political view, geography view and institutional view. The empirical tests provide first support for this view: in a setting characterized by a central bank traditionally less involved in supervision a unified model of supervision seems to be more likely to occur. The role of central bank involvement in supervision still holds when its level of monetary independence is taking in account.

Furthermore, the probability that a country will move toward a unified model is higher: the smaller the overall size of the economy; when the legal framework is characterized by German and Scandinavian roots. Therefore, also the economic size view and the law view matter.

Keywords: Financial Supervision, Central Banks, Political Economy, Law, Geography

JEL Classification: G18, G28, E58

Suggested Citation

Masciandaro, Donato, Determinants of Financial Supervision Regimes: Markets, Institutions, Politics, Law or Geography? (December 2006). 2nd Annual Conference on Empirical Legal Studies Paper, Available at SSRN: https://ssrn.com/abstract=957050 or http://dx.doi.org/10.2139/ssrn.957050

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

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