DP12764 The Economics of Supranational Bank Supervision
|Author(s):||Thorsten Beck, Consuelo Silva-Buston, Wolf Wagner|
|Publication Date:||March 2018|
|Keyword(s):||Supranational supervisory cooperation; cross-border banking; externalities|
|Programme Areas:||Financial Economics|
|Link to this Page:||www.cepr.org/active/publications/discussion_papers/dp.php?dpno=12764|
We document large variation in the propensity and the intensity in which countries cooperate in the supervision of banks. We show that these variations can be linked to differences in cooperation gains. Using hand-collected data on supranational agreements for 4,278 country pairs during the period 1995-2013, we find that proxies for bilateral cooperation gains a) increase the likelihood of cooperation, b) accelerate the adoption of cooperation, c) make intense forms of cooperation more likely. An analysis of regional cooperation shows that their make-up, as well as their evolution, is broadly consistent with predicted cooperation gains. Our findings suggests that a uniform approach to supranational supervision is not necessarily desirable as countries differ considerably in the extent to which theybenefit from cooperation.