Bank Regulation and Supervision : What Works Best?

Barth, James R. ; Caprio, Gerard, Jr. ; Levine, Ross

World Bank, Washington, DC

关键词: ACCOUNTING STANDARDS;    AGENTS;    APPLICATIONS;    AUDITS;    BANK CAPITAL;   

DOI  :  10.1596/1813-9450-2725
RP-ID  :  WPS2725

学科分类：社会科学、人文和艺术（综合）

来源: World Bank Open Knowledge Repository

【 摘 要 】

The authors draw on their new databaseon bank regulation and supervision in 107 countries toassess different governmental approaches to bank regulationand supervision and evaluate the efficacy of differentregulatory and supervisory policies. First, the authorsassess two broad and competing theories of governmentregulation: the helping-hand approach, according to whichgovernments regulate to correct market failures, and thegrabbing-hand approach, according to which governmentsregulate to support political constituencies. Second, theyassess the effect of an extensive array of regulatory andsupervisory policies on the development and fragility of thebanking sector. These policies include the following:Regulations on bank activities and the mixing of banking andcommerce. Regulations on entry by domestic and foreignbanks. Regulations on capital adequacy. Design features ofdeposit insurance systems. Supervisory power, independence,and resources; stringency of loan classification;provisioning standards; diversification guidelines; andpowers to take prompt corrective action. Regulationsgoverning information disclosure and fostering privatesector monitoring of banks. Government ownership of banks.The results raise a cautionary flag with regard to reformstrategies that place excessive reliance on a country'sadherence to an extensive checklist of regulatory andsupervisory practices that involve direct governmentoversight of and restrictions on banks. The findings, whichare much more consistent with the grabbing-hand view ofregulation than with the helping-hand view, suggest that theregulatory and supervisory practices most effective inpromoting good performance and stability in the bankingsector are those that force accurate information disclosure,empower private sector monitoring of banks, and fosterincentives for private agents to exert corporate control.