Is One Watchdog Better Than Three? International Experience with Integrated Financial Sector Supervision

March 1, 2006

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Format: Chicago

Martin Cihak, and Richard Podpiera. Is One Watchdog Better Than Three? International Experience with Integrated Financial Sector Supervision, (USA: International Monetary Fund, 2006) accessed June 18, 2025

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

Over the past two decades, there has been a clear trend toward integrating the regulation and supervision of banks, nonbank financial institutions, and securities markets. This paper reviews the international experience with integrated supervision. We survey the theoretical arguments for and against the integrated supervisory model, and use data on compliance with international standards to assess the validity of some of these arguments. We find that (i) full integration is associated with higher quality of supervision in insurance and securities and greater consistency of supervision across sectors, after controlling for the level of development; and (ii) fully integrated supervision is not associated with a significant reduction in supervisory staff.

Subject: Bank supervision, Banking, Basel Core Principles, Financial regulation and supervision, Financial sector

Keywords: Banking supervision, Consumer protection, Integrating supervision, Prudential supervision, Sectoral supervision model, Supervision function, Supervisory agency, WP

Publication Details

Pages:

32
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2006/057
Stock No:

WPIEA2006057
ISBN:

9781451863178
ISSN:

1018-5941

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