Cooperation in international banking supervision

Arbeitspapier

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 modeled as a 'cheap talk' game. We show that: (1) unless the interests of the countries are perfectly aligned, Þrst best closure regulation cannot be implemented; (2) the more aligned the interests are, the higher is welfare; (3) the bank can allocate its investments strategically across countries to escape closure.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: ECB Working Paper ; No. 316

Classification and Topics

• Classification: Wirtschaft ; Financial Aspects of Economic Integration ; Banks; Depository Institutions; Micro Finance Institutions; Mortgages ; Financial Institutions and Services: Government Policy and Regulation ; Economics of Regulation
• Subject: cheap talk ; closure ; multinational banks ; supervision

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Holthausen, Cornelia ; Rønde, Thomas
• Event: Veröffentlichung
• (who): European Central Bank (ECB)
• (where): Frankfurt a. M.
• (when): 2004

Further information

• Handle: http://hdl.handle.net/10419/152750
• Last update: 10.03.2025, 11:44 AM CET