Cross-Border Coordination of Prudential Supervision and Deposit Guarantees
IMF Working Papers, December 1, 2008
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- Cross-Border Coordination of Prudential Supervision and Deposit Guarantees
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Bibliographic details
- Published: December 1, 2008
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781451871418.001
Summary and central findings
- The recent scramble to expand deposit guarantees in Europe in response to financial turmoil confirms that the on-going integration of European financial markets requires closer coordination of prudential policies and financial safety nets.
- The paper studies the optimal design of prudential supervision and deposit guarantee regulations in a multi-country, integrated banking market such as the European Union.
- The analysis considers settings where policy-makers have either similar or asymmetric preferences regarding profitability and stability of the banking sector.
- The paper concludes with recommendations on policy priorities in this area.
Policy implications and recommendations (as concluded by the paper)
- Closer coordination of prudential supervision across integrated banking markets is necessary as financial market integration deepens.
- Coordination of deposit guarantee schemes should be considered alongside prudential policy harmonization to address cross-border spillovers.
- Policy priorities are identified to reduce regulatory arbitrage and to align incentives between countries with different preferences over profitability and stability.
Research scope and approach
- Focus: multi-country, integrated banking market (example cited: European Union).
- Policy-maker preference scenarios examined: similar preferences and asymmetric preferences about banking-sector profitability versus stability.
- Objective: identify optimal design of prudential supervision and deposit guarantee regulations under these scenarios.
Key statistics and publication metadata
- Pages: 26
- Volume: 2008
- Issue: 283
- Series: Working Paper No. 2008/283
- DOI: https://doi.org/10.5089/9781451871418.001
- Stock No: WPIEA2008283
- ISBN: 9781451871418
- ISSN: 1018-5941
- Date: December 1, 2008
- Subject: Banking, Banking crises, Deposit insurance, Distressed institutions, Financial sector stability
- Keywords: deposit guarantee, WP
Disclaimer noted in the source
- "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."
International Monetary Fund. "Cross-Border Coordination of Prudential Supervision and Deposit Guarantees", IMF Working Papers 2008, 283 (2008), accessed 9/17/2026, https://doi.org/10.5089/9781451871418.001.