Analyzing the topography of financial regulation
Abstract
Purpose
This paper aims to assess the topography of financial regulation, supervisory styles and performance of banking systems across the world.
Design/methodology/approach
The author gains insights by comparing regulatory and supervisory practices and their impact on banking system performance before and after the global crisis. The study illustrates the differences in regulation/supervision among crisis, non-crisis and BRICS countries. Even as capital ratios increased, bank governance and supervision regimes were strengthened, the private sector incentives to monitor banks deteriorated.
Findings
The results show that the crisis-countries had weaker regulatory and supervisory frameworks than those in emerging countries during the crisis period. BRICS countries as a distinct block have demonstrated uniqueness in their regulatory/supervisory styles that are similar neither to those in the crisis-countries nor to those in the non-crisis countries.
Originality/value
The originality of this study lies in its unique approach to assessing the bank regulation and supervision styles around the world and their impact on banking system profitability, as it uses a robust database. Further, this study provides not only a general assessment but also a comparative analysis of the BRICS and emerging economies. Regulatory agencies around the world would greatly benefit from systematic evidence on the relationship between bank performance and regulatory/supervisory systems.
Keywords
Citation
Swamy, V. (2017), "Analyzing the topography of financial regulation", Journal of Financial Economic Policy, Vol. 9 No. 4, pp. 475-515. https://doi.org/10.1108/JFEP-06-2017-0058
Publisher
:Emerald Publishing Limited
Copyright © 2017, Emerald Publishing Limited