Regulatory Capture in Banking

January 1, 2006

Preview Citation

Format: Chicago

Regulatory Capture in Banking, (USA: International Monetary Fund, 2006) accessed November 21, 2024

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

Banks will want to influence the bank regulator to favor their interests, and they typically have the means to do so. It is shown that such "regulatory capture" in banking does not imply ineffectual regulation; a "captured" regulator may impose very tight, costly prudential requirements to reduce negative spillovers of risk-taking by weaker banks. In these circumstances, differences in the regulatory regime across jurisdictions may persist because each adapts its regulations to suit its dominant incumbent institutions.

Subject: Bank regulation, Banking, Capital adequacy requirements, Deposit insurance, Financial regulation and supervision

Keywords: Bank, Capitalized bank, Central bank, Interest rate, WP

Publication Details

Pages:

25
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2006/034
Stock No:

WPIEA2006034
ISBN:

9781451862942
ISSN:

1018-5941

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