“One size does not fit all” – institutional determinants of financial safety net effectiveness
Aleksandra Masłowska-Jokinen , Anna Matysek-Jędrych
AbstractThe main objective of the study is to identify both similarities and diﬁerences among seemingly homogenous countries (OECD) in respect to their safety net design and a supervisory role played by central banks. This goal is achieved using an extensive data set, describing ﬁnancial supervisory institutions between 2000-2013, hence including recent modifications in response to global ﬁnancial crisis. The data show the existence of similar supervisory standards in both crisis- and non-crisis coun- tries. Whether it is a presence of a single supervisory authority, allocation of macroprudential responsibilities in a country, or implementing capital adequacy requirements, while working well in certain countries, did not make others immune to a crisis. At the same time, data show that non-crisis countries implemented stricter rules than those in crisis-countries, and that this process started way before the burst of the Global Financial Crisis. Often, these more rigorous rules were observed in countries with past crisis experience, indicating an importance of learning mechanism. With empirical analysis, we prove that certain basic safety net elements (obligatory reserve requirements or suﬂicient coverage of deposit insurance scheme), as well as high level of central bank ﬁnancial transparency are negatively correlated with the speed of credit growth. Based on our results and discussion on previous empirical analyses we give recommendations for institutions involved in the ﬁnancial safety net.
|Journal series||Working Papers - National Bank of Poland, ISSN 2084-624X, (0 pkt)|
|Publication size in sheets||6|
|Keywords in English||central bank, ﬁnancial regulation, ﬁnancial supervision, monetary policy, ﬁnancial crisis, macroprudential policy, safety net|
|Score|| = 0.0, 10-11-2019, ArticleFromJournal|
= 0.0, 10-11-2019, ArticleFromJournal
|Citation count*||2 (2020-08-10)|
* presented citation count is obtained through Internet information analysis and it is close to the number calculated by the Publish or Perish system.