The Economics of Supranational Bank Supervision
Category: Finance Seminar
When: 18 Juni 2019
Where: House of Finance, room Deutsche Bank (E.01)
Using hand-collected data on supranational agreements for 4,278 country pairs during the period 1995-2013, we show that the extent to which countries cooperate in the supervision of their banks can be explained by cooperation gains: proxies for the latter are found to increase the likelihood of cooperation, to accelerate cooperation, and to make intense forms of cooperation more likely. Exploiting bank-level variation arising from the geographical dispersion of large global banks, we also show that cooperation is associated with improved bank stability. The results suggest that supervisory cooperation is effective, but optimally varies across countries due to differences in cooperation gains.