Regulatory capture in banking
By: prepared by Daniel C. Hardy.
Contributors: International Monetary Fund. Monetary and Financial Systems Dept.
Series: IMF working paper -- WP/06/34
Publisher: International Monetary Fund, Monetary and Financial Systems Dept.
Published: 2006
Place of publication: Washington, D.C
Language: eng
Number of pages: 23
Subjects: Banks and banking -- State supervision.; Financial institutions -- State supervision.
Description: 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.
Notes: "January 2006."

Includes bibliographical references (p. 22-23).

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