What are the pros and cons of involving external auditors in banking supervision? This paper investigates the relationship between banking supervision and the involvement of external auditors from a theoretical and empirical perspective. We first provide a simple principal-agent framework that...

Today policymakers in all the countries, shocked by the financial crisis of the 2007-2008, are reconsidering carefully the features of their supervisory regimes. This paper reviews the changing face of the financial supervisory regimes introducing new indicators to measure the level of...

After the 2008 Financial Meltdown the need to reconsider the separation between commercial banking and other financial risky activities - ring fencing - in order to mitigate systemic risks and to address the too big to fail problems was publicly recognized both in the United States and in...

Financial regulation and supervision must change. Everybody agrees about that. But which is the state of the art? Both in the EU and the US reform proposals have been outlined. In order to be effective, such proposals should heed the lessons of the financial crisis, especially when it comes to...

"This essay shows that government credit-allocation schemes generate incentive conflicts that undermine the quality of bank supervision and eventually produce banking crisis. For political reasons, most countries establish a regulatory culture that embraces three economically contradictory...

This essay shows that government credit-allocation schemes generate incentive conflicts that undermine the quality of bank supervision and eventually produce banking crisis. For political reasons, most countries establish a regulatory culture that embraces three economically contradictory...

Following the 2007-09 Global Financial Crisis many countries have changed their financial supervisory architecture by increasing the involvement of central banks in supervision. This has led many scholars to argue that financial crises are an important driver in explaining the evolution of the...

This essay shows that government credit-allocation schemes generate incentive conflicts that undermine the quality of bank supervision and eventually produce banking crisis. For political reasons, most countries establish a regulatory culture that embraces three economically contradictory...

This paper studies the impact of technological change and regulatory competition on governmental efforts to generate rents for banks in two stylized regulatory environments. In the first environment, incentive-conflicted regulators attempt to create rents by restricting the size and scope of...