Regulatory Capture in Banking

Author/Editor:

International Monetary Fund

Publication Date:

January 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:

Banks will want to influence the bank regulator to favor their interests, and they typically have the means to do so. It is shown that such "regulatory capture" in banking does not imply ineffectual regulation; a "captured" regulator may impose very tight, costly prudential requirements to reduce negative spillovers of risk-taking by weaker banks. In these circumstances, differences in the regulatory regime across jurisdictions may persist because each adapts its regulations to suit its dominant incumbent institutions.

Series:

Working Paper No. 06/34

Subject:

English

Publication Date:

January 1, 2006

ISBN/ISSN:

9781451862942/1018-5941

Stock No:

WPIEA2006034

Price:

$15.00 (Academic Rate:$15.00)

Format:

Paper

Pages:

25

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