Banking Systems Around the Globe : Do Regulation and Ownership Affect the Performance and Stability?
The authors report cross-country data on commercial bank regulation and ownership in more than 60 countries. They evaluate the links between different regulatory/ownership practices in those countries and both financial sector performance and banki...
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| Format: | Policy Research Working Paper |
| Language: | English en_US |
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World Bank, Washington, DC
2014
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| Online Access: | http://documents.worldbank.org/curated/en/2000/04/437748/banking-systems-around-globe-regulation-ownership-affect-performance-stability http://hdl.handle.net/10986/18839 |
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okr-10986-188392021-04-23T14:03:46Z Banking Systems Around the Globe : Do Regulation and Ownership Affect the Performance and Stability? Barth, James R. Caprio, Gerard, Jr. Levine, Ross BANK ASSETS BANK PERFORMANCE BANK REGULATION BANK STRUCTURE BANK SUPERVISION BANKING CRISES BANKING CRISIS BANKING INDUSTRY BANKING REFORM BANKING SECTOR BANKING SECTOR DEVELOPMENT BANKING STABILITY BANKING SUPERVISION BANKING SYSTEM BANKING SYSTEMS BANKS BONDS CAPITALIZATION CENTRAL BANK COMMERCIAL BANKS DEBT DEPOSIT INSURANCE ECONOMIC ACTIVITY ECONOMIC DEVELOPMENT ECONOMIC GROWTH ECONOMIC PERFORMANCE EMPIRICAL EVIDENCE EQUITY CAPITAL FINANCIAL CONGLOMERATES FINANCIAL CRISES FINANCIAL FRAGILITY FINANCIAL INSTITUTIONS FINANCIAL INTERMEDIARIES FINANCIAL INTERMEDIARY DEVELOPMENT FINANCIAL PERFORMANCE FINANCIAL SECTOR FINANCIAL SECTOR DEVELOPMENT FINANCIAL SERVICES FINANCIAL STABILITY FINANCIAL SYSTEMS GDP INFLATION INSURANCE INTEREST INCOME INTEREST RATE INTEREST RATES INVESTMENT BANKING LAWS LIQUIDITY MORAL HAZARD MUTUAL FUND MUTUAL FUNDS NET INTEREST MARGIN NONBANK FINANCIAL INSTITUTIONS NONBANKS NONPERFORMING LOANS OWNERSHIP STRUCTURE POLICY ENVIRONMENT POSITIVE EFFECTS PRIVATE PROPERTY PRUDENTIAL SUPERVISION PUBLIC POLICY REGULATORY SYSTEMS SAVINGS SCARCE CAPITAL SECURITIES SECURITIES MARKETS STATE BANKS STATE OWNERSHIP STOCK MARKETS SUBSIDIARIES SYSTEMIC SYSTEMIC BANKING CRISES The authors report cross-country data on commercial bank regulation and ownership in more than 60 countries. They evaluate the links between different regulatory/ownership practices in those countries and both financial sector performance and banking system stability. They document substantial variation in response to these questions: Should it be public policy to limit the powers of commercial banks to engage in securities, insurance, and real estate activities? Should the mixing of banking and commerce be restricted by regulating commercial bank's ownership of non-financial firms and non-financial firms' ownership of commercial banks? Should states own commercial banks, or should those banks be privatized? They find: 1) There is no reliable statistical relationship between restrictions on commercial banks' ability to engage in securities, insurance, and real estate transactions and how well-developed the banking sector, how well-developed securities markets and non-bank financial intermediaries are, or the degree of industrial competition. Based on the evidence, it is difficult to argue confidently that restricting commercial banking activities benefits-or harms-the development of financial and securities markets or industrial competition. 2) There are no positive effects from mixing banking and commerce. 3) Countries that more tightly restrict and regulate the securities activities of commercial banks are substantially more likely to suffer a major banking crisis. Countries whose national regulations inhibit banks' ability to engage in securities underwriting, brokering, and dealing--and all aspects of the mutual fund business--tend to have more fragile financial systems. 4) The mixing of banking and commerce is associated with less financial stability. The evidence does not support admonitions to restrict the mixing of banking and commerce because mixing them will increase financial fragility. 5) On average, greater state ownership of banks tends to be associated with more poorly developed banks, nonbanks, and stock markets and more poorly functioning financial systems. 2014-06-30T18:33:59Z 2014-06-30T18:33:59Z 2000-04 http://documents.worldbank.org/curated/en/2000/04/437748/banking-systems-around-globe-regulation-ownership-affect-performance-stability http://hdl.handle.net/10986/18839 English en_US Policy Research Working Paper;No. 2325 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English en_US |
| topic |
BANK ASSETS BANK PERFORMANCE BANK REGULATION BANK STRUCTURE BANK SUPERVISION BANKING CRISES BANKING CRISIS BANKING INDUSTRY BANKING REFORM BANKING SECTOR BANKING SECTOR DEVELOPMENT BANKING STABILITY BANKING SUPERVISION BANKING SYSTEM BANKING SYSTEMS BANKS BONDS CAPITALIZATION CENTRAL BANK COMMERCIAL BANKS DEBT DEPOSIT INSURANCE ECONOMIC ACTIVITY ECONOMIC DEVELOPMENT ECONOMIC GROWTH ECONOMIC PERFORMANCE EMPIRICAL EVIDENCE EQUITY CAPITAL FINANCIAL CONGLOMERATES FINANCIAL CRISES FINANCIAL FRAGILITY FINANCIAL INSTITUTIONS FINANCIAL INTERMEDIARIES FINANCIAL INTERMEDIARY DEVELOPMENT FINANCIAL PERFORMANCE FINANCIAL SECTOR FINANCIAL SECTOR DEVELOPMENT FINANCIAL SERVICES FINANCIAL STABILITY FINANCIAL SYSTEMS GDP INFLATION INSURANCE INTEREST INCOME INTEREST RATE INTEREST RATES INVESTMENT BANKING LAWS LIQUIDITY MORAL HAZARD MUTUAL FUND MUTUAL FUNDS NET INTEREST MARGIN NONBANK FINANCIAL INSTITUTIONS NONBANKS NONPERFORMING LOANS OWNERSHIP STRUCTURE POLICY ENVIRONMENT POSITIVE EFFECTS PRIVATE PROPERTY PRUDENTIAL SUPERVISION PUBLIC POLICY REGULATORY SYSTEMS SAVINGS SCARCE CAPITAL SECURITIES SECURITIES MARKETS STATE BANKS STATE OWNERSHIP STOCK MARKETS SUBSIDIARIES SYSTEMIC SYSTEMIC BANKING CRISES |
| spellingShingle |
BANK ASSETS BANK PERFORMANCE BANK REGULATION BANK STRUCTURE BANK SUPERVISION BANKING CRISES BANKING CRISIS BANKING INDUSTRY BANKING REFORM BANKING SECTOR BANKING SECTOR DEVELOPMENT BANKING STABILITY BANKING SUPERVISION BANKING SYSTEM BANKING SYSTEMS BANKS BONDS CAPITALIZATION CENTRAL BANK COMMERCIAL BANKS DEBT DEPOSIT INSURANCE ECONOMIC ACTIVITY ECONOMIC DEVELOPMENT ECONOMIC GROWTH ECONOMIC PERFORMANCE EMPIRICAL EVIDENCE EQUITY CAPITAL FINANCIAL CONGLOMERATES FINANCIAL CRISES FINANCIAL FRAGILITY FINANCIAL INSTITUTIONS FINANCIAL INTERMEDIARIES FINANCIAL INTERMEDIARY DEVELOPMENT FINANCIAL PERFORMANCE FINANCIAL SECTOR FINANCIAL SECTOR DEVELOPMENT FINANCIAL SERVICES FINANCIAL STABILITY FINANCIAL SYSTEMS GDP INFLATION INSURANCE INTEREST INCOME INTEREST RATE INTEREST RATES INVESTMENT BANKING LAWS LIQUIDITY MORAL HAZARD MUTUAL FUND MUTUAL FUNDS NET INTEREST MARGIN NONBANK FINANCIAL INSTITUTIONS NONBANKS NONPERFORMING LOANS OWNERSHIP STRUCTURE POLICY ENVIRONMENT POSITIVE EFFECTS PRIVATE PROPERTY PRUDENTIAL SUPERVISION PUBLIC POLICY REGULATORY SYSTEMS SAVINGS SCARCE CAPITAL SECURITIES SECURITIES MARKETS STATE BANKS STATE OWNERSHIP STOCK MARKETS SUBSIDIARIES SYSTEMIC SYSTEMIC BANKING CRISES Barth, James R. Caprio, Gerard, Jr. Levine, Ross Banking Systems Around the Globe : Do Regulation and Ownership Affect the Performance and Stability? |
| relation |
Policy Research Working Paper;No. 2325 |
| description |
The authors report cross-country data on
commercial bank regulation and ownership in more than 60
countries. They evaluate the links between different
regulatory/ownership practices in those countries and both
financial sector performance and banking system stability.
They document substantial variation in response to these
questions: Should it be public policy to limit the powers of
commercial banks to engage in securities, insurance, and
real estate activities? Should the mixing of banking and
commerce be restricted by regulating commercial bank's
ownership of non-financial firms and non-financial
firms' ownership of commercial banks? Should states own
commercial banks, or should those banks be privatized? They
find: 1) There is no reliable statistical relationship
between restrictions on commercial banks' ability to
engage in securities, insurance, and real estate
transactions and how well-developed the banking sector, how
well-developed securities markets and non-bank financial
intermediaries are, or the degree of industrial competition.
Based on the evidence, it is difficult to argue confidently
that restricting commercial banking activities benefits-or
harms-the development of financial and securities markets or
industrial competition. 2) There are no positive effects
from mixing banking and commerce. 3) Countries that more
tightly restrict and regulate the securities activities of
commercial banks are substantially more likely to suffer a
major banking crisis. Countries whose national regulations
inhibit banks' ability to engage in securities
underwriting, brokering, and dealing--and all aspects of the
mutual fund business--tend to have more fragile financial
systems. 4) The mixing of banking and commerce is associated
with less financial stability. The evidence does not support
admonitions to restrict the mixing of banking and commerce
because mixing them will increase financial fragility. 5) On
average, greater state ownership of banks tends to be
associated with more poorly developed banks, nonbanks, and
stock markets and more poorly functioning financial systems. |
| format |
Publications & Research :: Policy Research Working Paper |
| author |
Barth, James R. Caprio, Gerard, Jr. Levine, Ross |
| author_facet |
Barth, James R. Caprio, Gerard, Jr. Levine, Ross |
| author_sort |
Barth, James R. |
| title |
Banking Systems Around the Globe : Do Regulation and Ownership Affect the Performance and Stability? |
| title_short |
Banking Systems Around the Globe : Do Regulation and Ownership Affect the Performance and Stability? |
| title_full |
Banking Systems Around the Globe : Do Regulation and Ownership Affect the Performance and Stability? |
| title_fullStr |
Banking Systems Around the Globe : Do Regulation and Ownership Affect the Performance and Stability? |
| title_full_unstemmed |
Banking Systems Around the Globe : Do Regulation and Ownership Affect the Performance and Stability? |
| title_sort |
banking systems around the globe : do regulation and ownership affect the performance and stability? |
| publisher |
World Bank, Washington, DC |
| publishDate |
2014 |
| url |
http://documents.worldbank.org/curated/en/2000/04/437748/banking-systems-around-globe-regulation-ownership-affect-performance-stability http://hdl.handle.net/10986/18839 |
| _version_ |
1764441592120213504 |