Basel Core Principles and Bank Soundness : Does Compliance Matter?

This paper studies whether compliance with the Basel Core Principles for effective banking supervision is associated with bank soundness. Using data for more than 3,000 banks in 86 countries, the authors find that neither the overall index of compl...

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Main Authors:	Demirgüç-Kunt, Asli, Detragiache, Enrica
Format:	Policy Research Working Paper
Language:	English
Published:	2012
Subjects:	ACCOUNTING ASSETS RATIOS AUTONOMY BALANCE SHEETS BANK ASSETS BANK BALANCE SHEETS BANK CREDIT BANK EQUITY BANK LOANS BANK PORTFOLIOS BANK RATINGS BANK REGULATION BANK RISK BANK RISK TAKING BANK SUPERVISION BANKING CRISES BANKING CRISIS BANKING LAWS BANKING SECTOR BANKING SECTOR DEVELOPMENT BANKING SUPERVISION BANKING SYSTEM BANKING SYSTEMS BANKS BEST PRACTICES CAPITAL ADEQUACY CAPITAL ADEQUACY RATIOS CAPITAL REGULATION CAPITAL STANDARDS CAPITALIZATION CENTRAL BANKS COMMERCIAL BANK COMMERCIAL BANKS CONFIDENCE CONSOLIDATED SUPERVISION CONTRACT ENFORCEMENT COOPERATIVE BANKS CORPORATE GOVERNANCE CORRUPTION COUNTRY COMPARISONS COUNTRY RISKS CREDIBILITY CREDIT EXPANSION CREDIT INSTITUTIONS CREDIT POLICIES CREDIT RATINGS CRIMINAL CURRENCY DECLARATION DEPOSIT DEPOSIT INSURANCE DEPOSITORS DEVELOPING COUNTRIES EMERGING MARKET EMERGING MARKET COUNTRIES EXCHANGE RATE EXTERNAL AUDITORS FINANCIAL CRISIS FINANCIAL DISTRESS FINANCIAL INSTITUTIONS FINANCIAL POLICIES FINANCIAL REGULATION FINANCIAL RISK FINANCIAL SERVICES FINANCIAL STABILITY FINANCIAL STATEMENTS FINANCIAL STRENGTH FINANCIAL STRENGTH RATING FINANCIAL SYSTEM FOREIGN BANKS GLOBAL BANKING HOST COUNTRY ILLIQUIDITY INFLATION INFLATION INDEX INFLATION RATE INFORMATION DISCLOSURE INTEGRITY INTEREST RATES INTERNATIONAL ACCOUNTING STANDARDS INTERNATIONAL BANK INTERNATIONAL FINANCIAL STATISTICS LAWS LEGAL FRAMEWORK LOAN LOAN SPREADS MACROECONOMIC CONTROL MACROECONOMIC ENVIRONMENT MACROECONOMIC POLICIES MACROECONOMIC VARIABLES MARKET STRUCTURE MONETARY FUND MORTGAGE MORTGAGE BANKS NONPERFORMING LOANS OPERATING COSTS OVERHEAD COSTS PORTFOLIOS PRIVATE CREDIT PRUDENTIAL REGULATIONS PRUDENTIAL SUPERVISION RATING AGENCIES REAL INTEREST REAL INTEREST RATES REGULATORY APPROACHES REGULATORY FRAMEWORKS REGULATORY GOVERNANCE REGULATORY STANDARDS RESERVES RETURN RETURN ON ASSETS RETURN ON EQUITY RETURNS RISK MANAGEMENT RISK TAKING RULE OF LAW SAFETY SAVINGS SAVINGS BANKS SECURITIZATION SHAREHOLDERS SMALL BANKS SOVEREIGN RATING SOVEREIGN RATINGS STORM SUPERVISION OF BANKS SUPERVISORY AGENCIES SUPERVISORY AGENCY SUPERVISORY AUTHORITIES SUPERVISORY FRAMEWORK SYSTEMIC RISK TREASURY
Online Access:	http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20091116091334 http://hdl.handle.net/10986/4321

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spelling	okr-10986-43212021-04-23T14:02:17Z Basel Core Principles and Bank Soundness : Does Compliance Matter? Demirgüç-Kunt, Asli Detragiache, Enrica ACCOUNTING ASSETS RATIOS AUTONOMY BALANCE SHEETS BANK ASSETS BANK BALANCE SHEETS BANK CREDIT BANK EQUITY BANK LOANS BANK PORTFOLIOS BANK RATINGS BANK REGULATION BANK RISK BANK RISK TAKING BANK SUPERVISION BANKING CRISES BANKING CRISIS BANKING LAWS BANKING SECTOR BANKING SECTOR DEVELOPMENT BANKING SUPERVISION BANKING SYSTEM BANKING SYSTEMS BANKS BEST PRACTICES CAPITAL ADEQUACY CAPITAL ADEQUACY RATIOS CAPITAL REGULATION CAPITAL STANDARDS CAPITALIZATION CENTRAL BANKS COMMERCIAL BANK COMMERCIAL BANKS CONFIDENCE CONSOLIDATED SUPERVISION CONTRACT ENFORCEMENT COOPERATIVE BANKS CORPORATE GOVERNANCE CORRUPTION COUNTRY COMPARISONS COUNTRY RISKS CREDIBILITY CREDIT EXPANSION CREDIT INSTITUTIONS CREDIT POLICIES CREDIT RATINGS CRIMINAL CURRENCY DECLARATION DEPOSIT DEPOSIT INSURANCE DEPOSITORS DEVELOPING COUNTRIES EMERGING MARKET EMERGING MARKET COUNTRIES EXCHANGE RATE EXTERNAL AUDITORS FINANCIAL CRISIS FINANCIAL DISTRESS FINANCIAL INSTITUTIONS FINANCIAL POLICIES FINANCIAL REGULATION FINANCIAL RISK FINANCIAL SERVICES FINANCIAL STABILITY FINANCIAL STATEMENTS FINANCIAL STRENGTH FINANCIAL STRENGTH RATING FINANCIAL SYSTEM FOREIGN BANKS GLOBAL BANKING HOST COUNTRY ILLIQUIDITY INFLATION INFLATION INDEX INFLATION RATE INFORMATION DISCLOSURE INTEGRITY INTEREST RATES INTERNATIONAL ACCOUNTING STANDARDS INTERNATIONAL BANK INTERNATIONAL FINANCIAL STATISTICS LAWS LEGAL FRAMEWORK LOAN LOAN SPREADS MACROECONOMIC CONTROL MACROECONOMIC ENVIRONMENT MACROECONOMIC POLICIES MACROECONOMIC VARIABLES MARKET STRUCTURE MONETARY FUND MORTGAGE MORTGAGE BANKS NONPERFORMING LOANS OPERATING COSTS OVERHEAD COSTS PORTFOLIOS PRIVATE CREDIT PRUDENTIAL REGULATIONS PRUDENTIAL SUPERVISION RATING AGENCIES REAL INTEREST REAL INTEREST RATES REGULATORY APPROACHES REGULATORY FRAMEWORKS REGULATORY GOVERNANCE REGULATORY STANDARDS RESERVES RETURN RETURN ON ASSETS RETURN ON EQUITY RETURNS RISK MANAGEMENT RISK TAKING RULE OF LAW SAFETY SAVINGS SAVINGS BANKS SECURITIZATION SHAREHOLDERS SMALL BANKS SOVEREIGN RATING SOVEREIGN RATINGS STORM SUPERVISION OF BANKS SUPERVISORY AGENCIES SUPERVISORY AGENCY SUPERVISORY AUTHORITIES SUPERVISORY FRAMEWORK SYSTEMIC RISK TREASURY This paper studies whether compliance with the Basel Core Principles for effective banking supervision is associated with bank soundness. Using data for more than 3,000 banks in 86 countries, the authors find that neither the overall index of compliance with the Basel Core Principles nor the individual components of the index are robustly associated with bank risk measured by Z-scores. The results of the analysis cast doubt on the usefulness of the Basel Core Principles in ensuring bank soundness. 2012-03-19T19:13:56Z 2012-03-19T19:13:56Z 2009-11-01 http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20091116091334 http://hdl.handle.net/10986/4321 English Policy Research Working Paper ; No. 5129 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank Publications & Research :: Policy Research Working Paper
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	English
topic	ACCOUNTING ASSETS RATIOS AUTONOMY BALANCE SHEETS BANK ASSETS BANK BALANCE SHEETS BANK CREDIT BANK EQUITY BANK LOANS BANK PORTFOLIOS BANK RATINGS BANK REGULATION BANK RISK BANK RISK TAKING BANK SUPERVISION BANKING CRISES BANKING CRISIS BANKING LAWS BANKING SECTOR BANKING SECTOR DEVELOPMENT BANKING SUPERVISION BANKING SYSTEM BANKING SYSTEMS BANKS BEST PRACTICES CAPITAL ADEQUACY CAPITAL ADEQUACY RATIOS CAPITAL REGULATION CAPITAL STANDARDS CAPITALIZATION CENTRAL BANKS COMMERCIAL BANK COMMERCIAL BANKS CONFIDENCE CONSOLIDATED SUPERVISION CONTRACT ENFORCEMENT COOPERATIVE BANKS CORPORATE GOVERNANCE CORRUPTION COUNTRY COMPARISONS COUNTRY RISKS CREDIBILITY CREDIT EXPANSION CREDIT INSTITUTIONS CREDIT POLICIES CREDIT RATINGS CRIMINAL CURRENCY DECLARATION DEPOSIT DEPOSIT INSURANCE DEPOSITORS DEVELOPING COUNTRIES EMERGING MARKET EMERGING MARKET COUNTRIES EXCHANGE RATE EXTERNAL AUDITORS FINANCIAL CRISIS FINANCIAL DISTRESS FINANCIAL INSTITUTIONS FINANCIAL POLICIES FINANCIAL REGULATION FINANCIAL RISK FINANCIAL SERVICES FINANCIAL STABILITY FINANCIAL STATEMENTS FINANCIAL STRENGTH FINANCIAL STRENGTH RATING FINANCIAL SYSTEM FOREIGN BANKS GLOBAL BANKING HOST COUNTRY ILLIQUIDITY INFLATION INFLATION INDEX INFLATION RATE INFORMATION DISCLOSURE INTEGRITY INTEREST RATES INTERNATIONAL ACCOUNTING STANDARDS INTERNATIONAL BANK INTERNATIONAL FINANCIAL STATISTICS LAWS LEGAL FRAMEWORK LOAN LOAN SPREADS MACROECONOMIC CONTROL MACROECONOMIC ENVIRONMENT MACROECONOMIC POLICIES MACROECONOMIC VARIABLES MARKET STRUCTURE MONETARY FUND MORTGAGE MORTGAGE BANKS NONPERFORMING LOANS OPERATING COSTS OVERHEAD COSTS PORTFOLIOS PRIVATE CREDIT PRUDENTIAL REGULATIONS PRUDENTIAL SUPERVISION RATING AGENCIES REAL INTEREST REAL INTEREST RATES REGULATORY APPROACHES REGULATORY FRAMEWORKS REGULATORY GOVERNANCE REGULATORY STANDARDS RESERVES RETURN RETURN ON ASSETS RETURN ON EQUITY RETURNS RISK MANAGEMENT RISK TAKING RULE OF LAW SAFETY SAVINGS SAVINGS BANKS SECURITIZATION SHAREHOLDERS SMALL BANKS SOVEREIGN RATING SOVEREIGN RATINGS STORM SUPERVISION OF BANKS SUPERVISORY AGENCIES SUPERVISORY AGENCY SUPERVISORY AUTHORITIES SUPERVISORY FRAMEWORK SYSTEMIC RISK TREASURY
spellingShingle	ACCOUNTING ASSETS RATIOS AUTONOMY BALANCE SHEETS BANK ASSETS BANK BALANCE SHEETS BANK CREDIT BANK EQUITY BANK LOANS BANK PORTFOLIOS BANK RATINGS BANK REGULATION BANK RISK BANK RISK TAKING BANK SUPERVISION BANKING CRISES BANKING CRISIS BANKING LAWS BANKING SECTOR BANKING SECTOR DEVELOPMENT BANKING SUPERVISION BANKING SYSTEM BANKING SYSTEMS BANKS BEST PRACTICES CAPITAL ADEQUACY CAPITAL ADEQUACY RATIOS CAPITAL REGULATION CAPITAL STANDARDS CAPITALIZATION CENTRAL BANKS COMMERCIAL BANK COMMERCIAL BANKS CONFIDENCE CONSOLIDATED SUPERVISION CONTRACT ENFORCEMENT COOPERATIVE BANKS CORPORATE GOVERNANCE CORRUPTION COUNTRY COMPARISONS COUNTRY RISKS CREDIBILITY CREDIT EXPANSION CREDIT INSTITUTIONS CREDIT POLICIES CREDIT RATINGS CRIMINAL CURRENCY DECLARATION DEPOSIT DEPOSIT INSURANCE DEPOSITORS DEVELOPING COUNTRIES EMERGING MARKET EMERGING MARKET COUNTRIES EXCHANGE RATE EXTERNAL AUDITORS FINANCIAL CRISIS FINANCIAL DISTRESS FINANCIAL INSTITUTIONS FINANCIAL POLICIES FINANCIAL REGULATION FINANCIAL RISK FINANCIAL SERVICES FINANCIAL STABILITY FINANCIAL STATEMENTS FINANCIAL STRENGTH FINANCIAL STRENGTH RATING FINANCIAL SYSTEM FOREIGN BANKS GLOBAL BANKING HOST COUNTRY ILLIQUIDITY INFLATION INFLATION INDEX INFLATION RATE INFORMATION DISCLOSURE INTEGRITY INTEREST RATES INTERNATIONAL ACCOUNTING STANDARDS INTERNATIONAL BANK INTERNATIONAL FINANCIAL STATISTICS LAWS LEGAL FRAMEWORK LOAN LOAN SPREADS MACROECONOMIC CONTROL MACROECONOMIC ENVIRONMENT MACROECONOMIC POLICIES MACROECONOMIC VARIABLES MARKET STRUCTURE MONETARY FUND MORTGAGE MORTGAGE BANKS NONPERFORMING LOANS OPERATING COSTS OVERHEAD COSTS PORTFOLIOS PRIVATE CREDIT PRUDENTIAL REGULATIONS PRUDENTIAL SUPERVISION RATING AGENCIES REAL INTEREST REAL INTEREST RATES REGULATORY APPROACHES REGULATORY FRAMEWORKS REGULATORY GOVERNANCE REGULATORY STANDARDS RESERVES RETURN RETURN ON ASSETS RETURN ON EQUITY RETURNS RISK MANAGEMENT RISK TAKING RULE OF LAW SAFETY SAVINGS SAVINGS BANKS SECURITIZATION SHAREHOLDERS SMALL BANKS SOVEREIGN RATING SOVEREIGN RATINGS STORM SUPERVISION OF BANKS SUPERVISORY AGENCIES SUPERVISORY AGENCY SUPERVISORY AUTHORITIES SUPERVISORY FRAMEWORK SYSTEMIC RISK TREASURY Demirgüç-Kunt, Asli Detragiache, Enrica Basel Core Principles and Bank Soundness : Does Compliance Matter?
relation	Policy Research Working Paper ; No. 5129
description	This paper studies whether compliance with the Basel Core Principles for effective banking supervision is associated with bank soundness. Using data for more than 3,000 banks in 86 countries, the authors find that neither the overall index of compliance with the Basel Core Principles nor the individual components of the index are robustly associated with bank risk measured by Z-scores. The results of the analysis cast doubt on the usefulness of the Basel Core Principles in ensuring bank soundness.
format	Publications & Research :: Policy Research Working Paper
author	Demirgüç-Kunt, Asli Detragiache, Enrica
author_facet	Demirgüç-Kunt, Asli Detragiache, Enrica
author_sort	Demirgüç-Kunt, Asli
title	Basel Core Principles and Bank Soundness : Does Compliance Matter?
title_short	Basel Core Principles and Bank Soundness : Does Compliance Matter?
title_full	Basel Core Principles and Bank Soundness : Does Compliance Matter?
title_fullStr	Basel Core Principles and Bank Soundness : Does Compliance Matter?
title_full_unstemmed	Basel Core Principles and Bank Soundness : Does Compliance Matter?
title_sort	basel core principles and bank soundness : does compliance matter?
publishDate	2012
url	http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20091116091334 http://hdl.handle.net/10986/4321
_version_	1764390917397020672

Basel Core Principles and Bank Soundness : Does Compliance Matter?

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