Prof. Jayanth R. Varma's Financial Markets Blog

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Prof. Jayanth R. Varma's Financial Markets Blog, A Blog on Financial Markets and Their Regulation

© Prof. Jayanth R. Varma
jrvarma@iima.ac.in

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Mon, 20 Mar 2006

Advantages of Single Regulator

An interesting IMF Working Paper by Martin Cihak and Richard Podpiera present evidence that single regulators (covering banking, securities and insurance) are associated with higher quality of supervision and with higher consistency of regulation across the three sectors. One of the problems that they face is that integrated regulators are typically found in more developed countries with more mature regulatory environments. They control for both of these in their study. Controlling for income reduces the effect a great deal but it remains positive and in many cases, it also remains statistically significant.

The authors measure quality of regulation by conformance to various international standards on core principles of regulation.

Posted at 18:36 on Mon, 20 Mar 2006     View/Post Comments (2)     permanent link