A Behavioral Approach to Financial Supervision, Regulation, and Central Banking

Author/Editor:

Ashraf Khan

Publication Date:

August 2, 2018

Electronic Access:

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Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary:

This paper describes how behavioral elements are relevant to financial supervision, regulation, and central banking. It focuses on (1) behavioral effects of norms (social, legal, and market); (2) behavior of others (internalization, identification, and compliance); and (3) psychological biases. It stresses that financial supervisors, regulators, and central banks have not yet realized the full potential that these behavioral elements hold. To do so, they need to devise a behavioral approach that includes aspects relating to individual and group behavior. The paper provides case examples of experiments with such an approach, including behavioral supervision. Finally, it highlights areas for further research.

Series:

Working Paper No. 18/178

Subject:

English

Publication Date:

August 2, 2018

ISBN/ISSN:

9781484372289/1018-5941

Stock No:

WPIEA2018178

Price:

$18.00 (Academic Rate:$18.00)

Format:

Paper

Pages:

56

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