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

Author/Editor:

Martin Cihak ; Richard Podpiera

Publication Date:

March 1, 2006

Electronic Access:

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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.

Series:

Working Paper No. 06/57

Subject:

Bank regulations Bank supervision Financial sector Insurance regulations Insurance supervision Securities regulations

English

Publication Date:

March 1, 2006

ISBN/ISSN:

9781451863178/1018-5941

Stock No:

WPIEA2006057

Format:

Paper

Pages:

32

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