Nothing Special   »   [go: up one dir, main page]
IDEAS home Printed from https://ideas.repec.org/p/bog/wpaper/89.html
   My bibliography  Save this paper

Institutions Matter: Financial Supervision Architecture, Central Bank and Path Dependence. General Trends and the South Eastern European Countries

Author

Listed:
  • Donato Masciandaro

    (Paolo Baffi Centre, Bocconi University)

  • Marc Quintyn

    (IMF Institute, International Monetary Fund)

Abstract
We propose a path dependence approach to analyze the evolution of the financial supervisory architecture, focusing on the institutional role of the central bank, and then apply our framework to describe the institutional settings in a selected sample of countries. The policymaker who decides to maintain or reform the supervisory architecture is influenced by the existing institutional setting in a systematic way: the more the central bank is actually involved in supervision, the less likely a more concentrated supervisory regime will emerge, and vice versa (path dependence effect). We test the path dependence effect describing and evaluating the evolution and the present state of the architecture of six national supervisory regimes in South Eastern Europe (SEE): Albania, Bulgaria, Greece, Romania, Serbia and Turkey. The study of the SEE countries confirms the postulated role of the central bank in the institutional setting. In five cases the high involvement of the central bank in supervision is correlated with a multi–authority regime, while in one case a high degree of financial supervision unification is related with low central bank involvement.

Suggested Citation

  • Donato Masciandaro & Marc Quintyn, 2008. "Institutions Matter: Financial Supervision Architecture, Central Bank and Path Dependence. General Trends and the South Eastern European Countries," Working Papers 89, Bank of Greece.
    • Handle: RePEc:bog:wpaper:89
    as

    Download full text from publisher

    File URL: http://www.bankofgreece.gr/BogEkdoseis/Paper200889.pdf
    File Function: Full Text
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Lucia Dalla Pellegrina & Donato Masciandaro, 2008. "Politicians, central banks, and the shape of financial supervision architectures," Journal of Financial Regulation and Compliance, Emerald Group Publishing Limited, vol. 16(4), pages 290-317, November.
    2. Honohan,Patrick & Laeven,Luc (ed.), 2005. "Systemic Financial Crises," Cambridge Books, Cambridge University Press, number 9780521851855.
    3. Alberto Alesina & Guido Tabellini, 2003. "Bureaucrats or Politicians?," Working Papers 238, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
    4. Masciandaro, Donato, 2007. "Divide et impera: Financial supervision unification and central bank fragmentation effect," European Journal of Political Economy, Elsevier, vol. 23(2), pages 285-315, June.
    5. Donato Masciandaro & María J. Nieto & Henriëtte Prast, 2007. "Financial governance of banking supervision," Working Papers 0725, Banco de España.
    6. Goodhart, Charles & Schoenmaker, Dirk, 1995. "Should the Functions of Monetary Policy and Banking Supervision Be Separated?," Oxford Economic Papers, Oxford University Press, vol. 47(4), pages 539-560, October.
    7. Taylor, Michael & Fleming, Alex, 1999. "Integrated financial supervision : lessons of Northern European experience," Policy Research Working Paper Series 2223, The World Bank.
    8. Alicia García Herrero & Pedro del Río, 2003. "Financial stability and the design of monetary policy," Working Papers 0315, Banco de España.
    9. Alessandro Gambini & Mr. Salim M. Darbar & Mr. Marco Arnone, 2007. "Banking Supervision: Quality and Governance," IMF Working Papers 2007/082, International Monetary Fund.
    10. Masciandaro, Donato, 2009. "Politicians and financial supervision unification outside the central bank: Why do they do it?," Journal of Financial Stability, Elsevier, vol. 5(2), pages 124-146, June.
    11. Donato Masciandaro & Marc Quintyn (ed.), 2007. "Designing Financial Supervision Institutions," Books, Edward Elgar Publishing, number 12684.
    12. Kenneth Kaoma Mwenda, 2006. "Legal Aspects of Financial Services Regulation and the Concept of a Unified Regulator," World Bank Publications - Books, The World Bank Group, number 6952.
    13. Alicia García Herrero & Pedro del Río López, 2003. "Implications of the design of monetary policy for financial stability," Macroeconomics 0304008, University Library of Munich, Germany.
    14. Masciandaro, Donato & Quintyn, Marc, 2008. "Helping hand or grabbing hand?: Politicians, supervision regime, financial structure and market view," The North American Journal of Economics and Finance, Elsevier, vol. 19(2), pages 153-173, August.
    15. Donato Masciandaro, 2006. "E Pluribus Unum? Authorities' Design in Financial Supervision: Trends and Determinants," Open Economies Review, Springer, vol. 17(1), pages 73-102, January.
    16. Mr. Marc G Quintyn & Donato Masciandaro, 2008. "Helping Hand or Grabbing Hand? Supervisory Architecture, Financial Structure and Market View," IMF Working Papers 2008/047, International Monetary Fund.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Dimitrios Sideris, 2009. "Optimum Currency Areas Structural Changes and the Endogeneity of the OCA Criteria: Evidence from Six New EU Member States," Working Papers 99, Bank of Greece.
    2. Vasile Cocriş & Bogdan Căpraru, 2011. "Financial Supervision Structure In Romania. A Comparative Approach," Annales Universitatis Apulensis Series Oeconomica, Faculty of Sciences, "1 Decembrie 1918" University, Alba Iulia, vol. 2(13), pages 1-23.
    3. Mertzanis, Charilaos, 2020. "Financial supervision structure, decentralized decision-making and financing constraints," Journal of Economic Behavior & Organization, Elsevier, vol. 174(C), pages 13-37.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Dalla Pellegrina, L. & Masciandaro, D. & Pansini, R.V., 2013. "The central banker as prudential supervisor: Does independence matter?," Journal of Financial Stability, Elsevier, vol. 9(3), pages 415-427.
    2. Donato Masciandaro & Marc Quintyn, 2013. "The Evolution of Financial Supervision: the Continuing Search for the Holy Grail," SUERF 50th Anniversary Volume Chapters, in: Morten Balling & Ernest Gnan (ed.), 50 Years of Money and Finance: Lessons and Challenges, chapter 8, pages 263-318, SUERF - The European Money and Finance Forum.
    3. L. Dalla Pellegrina & D. Masciandaro & R. Pansini, 2014. "Do exchange rate regimes affect the role of central banks as banking supervisors?," European Journal of Law and Economics, Springer, vol. 38(2), pages 279-315, October.
    4. Donato Masciandaro & Marc Quintyn, 2011. "Regulating the Regulators: The Changing Face of Financial Supervision Architectures Before and After the Financial Crisis," Chapters, in: Sylvester Eijffinger & Donato Masciandaro (ed.), Handbook of Central Banking, Financial Regulation and Supervision, chapter 16, Edward Elgar Publishing.
    5. Donato Masciandaro & Maria J. Nieto & Marc Quintyn, 2011. "Will They Sing the Same Tune? Measuring Convergence in the New European System of Financial Supervisors," Chapters, in: Sylvester Eijffinger & Donato Masciandaro (ed.), Handbook of Central Banking, Financial Regulation and Supervision, chapter 17, Edward Elgar Publishing.
    6. Masciandaro Donato, 2012. "Back to the Future?: Central Banks as Prudential Supervisors in the Aftermath of the Crisis," European Company and Financial Law Review, De Gruyter, vol. 9(2), pages 112-130, July.
    7. Lucia Dalla Pellegrina & Donato Masciandaro & Rosaria Vega Pansini, 2011. "New Advantages of Tying One’s Hands: Banking Supervision, Monetary Policy and Central Bank Independence," Chapters, in: Sylvester Eijffinger & Donato Masciandaro (ed.), Handbook of Central Banking, Financial Regulation and Supervision, chapter 8, Edward Elgar Publishing.
    8. Donato Masciandaro, 2018. "Central Banks And Macroprudential Policies: Economics And Politics," BAFFI CAREFIN Working Papers 1878, BAFFI CAREFIN, Centre for Applied Research on International Markets Banking Finance and Regulation, Universita' Bocconi, Milano, Italy.
    9. Masciandaro, Donato & Volpicella, Alessio, 2016. "Macro prudential governance and central banks: Facts and drivers," Journal of International Money and Finance, Elsevier, vol. 61(C), pages 101-119.
    10. Masciandaro, D. & Nieto, M. & Prast, H.M., 2007. "Financial Governance of Banking Supervision," Other publications TiSEM 65d7ff26-dca3-4da3-86ff-6, Tilburg University, School of Economics and Management.
    11. Melecky, Martin & Podpiera, Anca Maria, 2012. "Institutional structures of financial sector supervision, their drivers and emerging benchmark models," MPRA Paper 37059, University Library of Munich, Germany.
    12. D. Bartolozzi & M. Gara & D.J. Marchetti & D. Masciandaro, 2019. "Designing The Anti-Money Laundering Supervisor: Theory, Institutions And Empirics," BAFFI CAREFIN Working Papers 19126, BAFFI CAREFIN, Centre for Applied Research on International Markets Banking Finance and Regulation, Universita' Bocconi, Milano, Italy.
    13. Melecky, Martin & Podpiera, Anca Maria, 2013. "Institutional structures of financial sector supervision, their drivers and historical benchmarks," Journal of Financial Stability, Elsevier, vol. 9(3), pages 428-444.
    14. Masciandaro, Donato, 2009. "Politicians and financial supervision unification outside the central bank: Why do they do it?," Journal of Financial Stability, Elsevier, vol. 5(2), pages 124-146, June.
    15. Mertzanis, Charilaos, 2020. "Financial supervision structure, decentralized decision-making and financing constraints," Journal of Economic Behavior & Organization, Elsevier, vol. 174(C), pages 13-37.
    16. Masciandaro, Donato & Quintyn, Marc, 2008. "Helping hand or grabbing hand?: Politicians, supervision regime, financial structure and market view," The North American Journal of Economics and Finance, Elsevier, vol. 19(2), pages 153-173, August.
    17. Bartolozzi, D. & Gara, M. & Marchetti, D.J. & Masciandaro, D., 2022. "Designing the anti-money laundering supervisor: The governance of the financial intelligence units," International Review of Economics & Finance, Elsevier, vol. 80(C), pages 1093-1109.
    18. Masciandaro, Donato & Pansini, Rosaria Vega & Quintyn, Marc, 2013. "The economic crisis: Did supervision architecture and governance matter?," Journal of Financial Stability, Elsevier, vol. 9(4), pages 578-596.
    19. Ovidiu Stoica & Roxana Scantee, 2012. "Financial Supervision and Banking Competition in European Union," Acta Universitatis Danubius. OEconomica, Danubius University of Galati, issue 8(6), pages 56-66, December.
    20. Masciandaro, Donato, 2022. "Independence, conservatism, and beyond: Monetary policy, central bank governance and central banker preferences (1981–2021)," Journal of International Money and Finance, Elsevier, vol. 122(C).

    More about this item

    Keywords

    Financial Supervision; Central Banks; Path Dependence; Political Economy; South Eastern Europe.;
    All these keywords.

    JEL classification:

    • G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bog:wpaper:89. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Anastasios Rizos (email available below). General contact details of provider: https://edirc.repec.org/data/boggvgr.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.