Inconsistent regulators
Subtitle: evidence from banking
By: Sumit Agarwal ... [et al.].
Contributors: National Bureau of Economic Research
Series: NBER working paper series -- working paper 17736; Working paper series (National Bureau of Economic Research : Online) -- working paper no. 17736.
Publisher: National Bureau of Economic Research
Published: 2012
Place of publication: Cambridge, MA
Language: eng
Format: Electronic resource
Description: "US state chartered commercial banks are supervised alternately by state and federal regulators.  Each regulator supervises a given bank for a fixed time period according to a predetermined rotation schedule.  We use unique data to examine differences between federal and state regulators for these banks.  Federal regulators are significantly less lenient, downgrading supervisory ratings about twice as frequently as state supervisors.  Under federal regulators, banks report higher nonperforming loans, more delinquent loans, higher regulatory capital ratios, and lower ROA.  There is a higher frequency of bank failures and problem-bank rates in states with more lenient supervision relative to the federal benchmark.  Some states are more lenient than others.  Regulatory capture by industry constituents and supervisory staff characteristics can explain some of these differences.  These findings suggest that inconsistent oversight can hamper the effectiveness of regulation by delaying corrective actions and by inducing costly variability in operations of regulated entities"--National Bureau of Economic Research web site.
Notes: Title from PDF file as viewed on 3/6/2012.

Includes bibliographical references.

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