Central bank independence, financial supervision structure and bank soundness: An empirical analysis around the crisis

Sustainability and Efficiency of the European Banking Market after the Global Crisis: The Impact of Some Strategic Choices

“…The evolution of the supervision scheme issued by the Basel Committee and the introduction of the Single Supervisory Mechanism in the Euro Area pushed up a new branch of research that studied the relationship among efficiency, supervisory models and degree of independence of the Central Authority [55][56][57][58]. Similarly, with the introduction of new rules dealing with risk and corporate governance, other works focused on the impact of risk management on efficiency.…”

Twin Peaks for Europe: State-of-the-Art Financial Supervisory Consolidation

“…The real bills doctrine conveniently linked central banks' price stability and financial stability function, until the Great Depression irrevocably shattered the unwarranted trust in the private sector's inherently self-stabilizing forces, on which it implicitly relied. Examples include the provision of liquidity in the interbank money markets through different refinancing operations at the onset of the crisis to ease banks' growing nervousness about a possible liquidity shortage, the cutting of policy interest rates to counter the money market breakdown and the imminent danger of a major credit crunch triggered by the bankruptcy of Lehman Brothers in September 2008, and various forms of assistance in the resolution of systemically important financial entities like 25 For a good overview of the CBI literature see Debelle and Fischer (1994) [4] with the references cited therein and Doumpos et al (2015) [5] also with further references. Even though central banks retained some influence on policy decisions, it was governments that ultimately determined the desirable stance of monetary policy and that exercise included the setting of the official interest rate.…”

“…42 [14]. 43 See Blinder (2010) [1], Buiter (2012) [34], Doumpos et al (2015) [5], Goodhart (2011) [9], and Masciandaro (2009) [13]. 44 [52], p. 23 et seq.…”

“…[54], p. 17.40 See Buiter (2012) [34], p. 26 et seq.,Doumpos et al (2015) [5], p. 2 et seq. and the references cited therein, and Goodhart (2011)[9], p. 148 and 151.…”

Banking business models and risk: Findings from the ECB's comprehensive assessment

“…More recently, Gaganis and Pasiouras () study whether the central bank's involvement in financial supervision, the unification of financial authorities, and the independence of the Central Bank affect banks’ profit efficiency and find a negative relationship. Doumpos, Gaganis, and Pasiouras () analyse the impact of supervisory regimes during the crisis. They find that Central Bank's independence and the power of the supervisory authorities have a positive impact on banks’ soundness, especially for smaller banks whereas a unified supervisor mitigates the adverse effects of the crisis, especially for large banks.…”