Will they Sing the Same Tune? Measuring Convergence in the new European System of Financial Supervisors

Author/Editor:

Marc G Quintyn ; Donato Masciandaro ; María Nieto

Publication Date:

July 1, 2009

Electronic Access:

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Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary:

In June 2009 a new financial supervisory framework for the European Union (EU) was endorsed, consisting of a macro- and a micro-prudential pillar. The latter is composed of a Steering Committee, a supranational layer and a network of national supervisory authorities at the bottom, de facto establishing a complex multiple principals-multiple agents network. This paper focuses on the network of national agencies. Starting from an analysis of supervisory architectures and governance arrangements, we assess to what extent lack of convergence could undermine efficient and effective supervision. The main conclusion is that harmonization of governance arrangements towards best practice would better align supervisors' incentive structures and, hence, be beneficial for the quality of supervision.

Series:

Working Paper No. 2009/142

Subject:

Bank supervision Banking Financial crises Financial regulation and supervision Legal support in revenue administration

English

Publication Date:

July 1, 2009

ISBN/ISSN:

9781451872897/1018-5941

Stock No:

WPIEA2009142

Pages:

43

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