A detailed assessment report on the observance of China’s compliance of Basel Core Principles for effective banking supervision is presented. Regulation and supervision of China’s banking system has made impressive progress in the past few years, led by an activist, forward-looking...

The paper studies risk mitigation associated with capital regulation, in a context where banks may choose tail risk asserts. We show that this undermines the traditional result that high capital reduces excess risk-taking driven by limited liability. Moreover, higher capital may have an...

We identify different sources of risk as important determinants of banks' corporate structures when expanding into new markets. Subsidiary-based corporate structures benefit from greater protection against economic risk because of affiliate-level limited liability, but are more exposed to the...

This simulation-based paper investigates the impact of different methods of dynamic provisioning on bank soundness and shows that this increasingly popular macroprudential tool can smooth provisioning costs over the credit cycle and lower banks’ probability of default. In addition, the...

This article is an overview of existing deposit insurance in the European Union. There are various national deposit schemes that form the source of insurance. The schemes come up with various coverage, contributions, and fund sizes. The recent financial crisis has brought about a change in the...

This paper presents a Financial System Stability Assessment Update, including Reports on the Observance of Standards and Codes (ROSC) on the Securities Regulation, Insolvency and Creditor Rights Systems, and Payment Systems in Colombia. Overall, the financial sector appears relatively stable and...

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...

Did the occurrence of systemic banking crises in the 1990s and 2000s significantly alter the behavior of banks in the Mercosur? The objective of this paper is to answer this question by analyzing changes in bank behavior after crises in the Mercosur region. To our knowledge, this is the first...

This paper presents key findings of the Financial System Stability Assessment of the Republic of Estonia. The Estonian financial sector is highly concentrated and foreign owned. Financial indicators suggest a sound banking sector, and show particular strength in asset quality and earnings. The...

Economic growth in Bosnia and Herzegovina (BiH) has been impressive with GDP. The dominance of foreign-owned bank subsidiaries has transformed the financial sector and altered the risks to financial stability. Reforms should focus on strengthening banking supervision and adapting it to the...