a retrospective on bank regulation and supervision around the world n.
Download
Skip this Video
Loading SlideShow in 5 Seconds..
A Retrospective on Bank Regulation and Supervision Around the World PowerPoint Presentation
Download Presentation
A Retrospective on Bank Regulation and Supervision Around the World

Loading in 2 Seconds...

play fullscreen
1 / 24

A Retrospective on Bank Regulation and Supervision Around the World - PowerPoint PPT Presentation


  • 143 Views
  • Uploaded on

A Retrospective on Bank Regulation and Supervision Around the World . James R. Barth Penny Prabha Auburn University and Milken Institute Milken Institute Capital Flows and Financial Liberalization Annual CEMP-CIEPS FORUM

loader
I am the owner, or an agent authorized to act on behalf of the owner, of the copyrighted work described.
capcha
Download Presentation

PowerPoint Slideshow about 'A Retrospective on Bank Regulation and Supervision Around the World' - ardice


An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.


- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -
Presentation Transcript
a retrospective on bank regulation and supervision around the world
A Retrospective on Bank Regulation and Supervision Around the World
  • James R. Barth Penny Prabha
  • Auburn University and Milken Institute Milken Institute
  • Capital Flows and Financial Liberalization
  • Annual CEMP-CIEPS FORUM
  • March 13, 2014
  • Arlington, Virginia
motivation more frequent and severe banking crises worldwide
Motivation: More Frequent (and Severe) Banking Crises Worldwide

Sources: Reinhart and Rogoff (2008), Milken Institute.

motivation cost of banking crises 2007 2011
Motivation:Cost of Banking Crises 2007 - 2011

Source: Laeven, Valencia (2012).

motivation cost of banking crises banking crises outcomes 1970 2011
Motivation: Cost of Banking Crises Banking Crises Outcomes, 1970-2011

Source: Laeven, Valencia (2012).

motivation u s history of crises more regulators with more power
Motivation: U.S. History of CrisesMore Regulators with More Power

Federal

Financial

Depository

Housing

Institutions Reform,

Institutions

Federal

Finance

Recovery and

Deregulation

Reserve Act

Regulatory

Enforcement Act

and Monetary

(1913)

Reform Act

(1989)

Control Act

(Bank runs)

(2008)

(S&L crisis)

(1980)

Dodd

Frank

(S&L crisis)

Wall Street

1860

1980

2000

Reform and

Consumer

1940

1960

1880

1920

1900

2010

Protection

Act

National

(2010)

Bank Act

Garn

-

St

Emergency

Germain

(1864)

Federal

Federal

Economic

Depository

Deposit

Deposit

Sarbanes

Stabilization

Institutions Act

(Civil

Insurance

Insurance

Oxley Act

Act

War &

(1982)

National

Corporation

Corp. & SEC

(2002)

(2008)

wildcat

(S&L crisis)

Currency Act

Improvement

(Great

(Enron and

banking)

(1863)

Act

Depression)

WorldCom

(1991)

bankruptcies)

(Banking crisis)

bank regulation and supervision matter
Bank Regulation and Supervision Matter
  • Fed Chairman Ben Bernanke said, “stronger regulation and supervision aimed at problems with underwriting practices and lenders’ risk management would have been a more effective and surgical approach to constraining the housing bubble than a general increase in interest rates.”
  • Measuring bank regulation and supervision around the world is hard.
  • Yet, as Lord Kelvin said, “[I]f you cannot measure it, you cannot improve it.”
countries and questions in the world bank surveys
Countries and Questions in the World Bank Surveys
  • Survey I (1999): 118 countries and 180 questions
  • Survey II (2003): 151 countries and 275 questions
  • Survey III (2006): 143 countries and 300 questions
  • Survey IV (2011): 143 countries and 270 questions
  • Surveys I-IV: 84 countries
data and indexes
Data and Indexes
  • The dataset includes information on: the organization of national banking authorities, the details of financial regulation and supervision, and the size and structure of the banking systems.
  • About 50 indexes of policies are constructed to measure: capital requirements, ownership restrictions, deposit insurance generosity, allowable activities, among other regulatory and supervisory policies.
dataset for surveys i iv
Dataset for Surveys I-IV

James Barth

  • http://business.auburn.edu/~barthjr/Web%20Dataset.htm

Jerry Caprio

  • http://econ.williams.edu/people/gcaprio

Ross Levine

  • http://faculty.haas.berkeley.edu/ross_levine/Regulation.htm
slide14
Differences in Total Assets of Big U.S. Banks Due to Differences in the Accounting Treatment of Derivatives Q2 2012

Sources: BankScope, Bloomberg, annual reports, and Milken Institute.

slide20

New Survey IV Information: Bank Supervisory Criteria for Assessing Systemic Risk Number of Countries Reporting Yes for Each Factor

convergence
Convergence
  • We attempt to assess whether bank regulatory and supervisory practices have converged across countries.
  • One way to do so is to calculate the normalized standard deviation in Survey I and Survey IV for each index.
  • Another way is to assess the number of countries that are x% different from the median value, where x equals 10%, 25%, 30%, and 50%.
slide23

Was There a Convergence or Divergence in Regulation and Supervision Overtime? (Number of Countries with Index Values Different From the Median by At Least 10, 25, 30 or 50 Percent)