Banking on the principles
Subtitle: compliance with basel core principles and bank soundness
By: Asli Demirguc-Kunt, Enrica Detragiache, Thierry Tressel, Research working paper Collection Title:Policy
Contributors: Detragiache, Enrica; World Bank
Series: Policy research working paper -- 3954; Policy research working papers (Online) -- 3954.
Publisher: World Bank
Published: 2006
Place of publication: Washington, D.C
Language: eng
Format: [electronic resource] :
Subjects: Banks and banking; Case studies; State supervision
Description: "This paper studies whether compliance with the Basel Core Principles for Effective Banking Supervision (BCP) improves bank soundness.  BCP compliance assessments provide a unique source of information about the quality of bank supervision and regulation around the world.  The authors find a significant and positive relationship between bank soundness (measured with Moody's financial strength ratings) and compliance with principles related to information provision.  Specifically, countries that require banks to report regularly and accurately their financial data to regulators and market participants have sounder banks.  This relationship is robust to controlling for broad indexes of institutional quality, macroeconomic variables, sovereign ratings, as well as reverse causality.  Measuring soundness through z-scores yields similar results.  The findings emphasize the importance of transparency in making supervisory processes effective and strengthening market discipline.  Countries aiming to upgrade banking regulation and supervision should consider giving priority to information provision over other elements of the Core Principles. "--World Bank web site.
Notes: Title from PDF file as viewed on 8/28/2006.

Includes bibliographical references.

Also available in print.

System requirements: Adobe Acrobat Reader.

Mode of access: World Wide Web.