In 2001, government guarantees for savings banks in Germany were removed following a law suit. We use this natural experiment to examine the effect of government guarantees on bank risk taking, using a large data set of matched bank/borrower information. The results suggest that banks whose...

During 2005-2006, the Chinese government implemented a reform aimed at eliminating the so-called non-tradable shares (NTS), shares typically held by the State or by politically connected institutional investors that were issued at the early stage of financial market development. Our analysis,...

This paper analyzes cooperation between sovereign national authorities in the supervision and regulation of a multinational bank. We take a political economy approach to regulation and assume that supervisors maximize the welfare of their own country. The communication between the supervisors is...

Article 39b(2) of the CRA Regulation states that the European Commission shall adopt a report by end 2014 – after receiving ESMA’s technical advice – on the appropriateness of the development of a European creditworthiness assessment for sovereign debt.In its request for advice, the...

For the purposes of this advice, ESMA provides its views based on the quantitative information contained in the CEREP public database and on information publicly disclosed by credit rating agencies registered with ESMA.Additionally, ESMA’s advice has been informed by its first supervisory...

The European Securities and Markets Authorities (ESMA) has published this report to inform of the outcome and findings of its general investigation in the way credit rating agencies (CRAs) conduct surveillance of structured finance credit ratings, as indicated in ESMA’s Credit Rating Agencies...

One of the objectives of the CRA Regulation is to increase competition in the markets for credit ratings by encouraging issuers to use smaller credit rating agencies. To this end, Article 8d(1) of the CRA Regulation states that where issuers or related third parties intend to appoint at least...