Bank Regulation and Supervision around the World : A Crisis Update
This paper presents the latest update of the World Bank Bank Regulation and Supervision Survey, and explores two questions. First, were there significant differences in regulation and supervision between crisis and non-crisis countries? Second, wha...
| Main Authors: | , , , |
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| Format: | Policy Research Working Paper |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2013
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2012/12/17039335/bank-regulation-supervision-around-world-crisis-update http://hdl.handle.net/10986/12159 |
| Summary: | This paper presents the latest update of
the World Bank Bank Regulation and Supervision Survey, and
explores two questions. First, were there significant
differences in regulation and supervision between crisis and
non-crisis countries? Second, what aspects of regulation and
supervision changed significantly during the crisis period?
The paper finds significant differences between crisis and
non-crisis countries in several aspects of regulation and
supervision. In particular, crisis countries (a) had less
stringent definitions of capital and lower actual capital
ratios, (b) faced fewer restrictions on non-bank activities,
(c) were less strict in the regulatory treatment of bad
loans and loan losses, and (d) had weaker incentives for the
private sector to monitor banks' risks. Survey results
also suggest that the overall regulatory response to the
crisis has been slow, and there is room to improve
regulation and supervision, as well as private incentives to
monitor risk-taking. Specifically, comparing regulatory and
supervisory practices before and after the global crisis,
the paper finds relatively few changes: capital ratios
increased (primarily among non-crisis countries), deposit
insurance schemes became more generous, and some reforms
were introduced in the area of bank governance and bank resolution. |
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