Table of Contents

Handbook of Central Banking, Financial Regulation and Supervision

Handbook of Central Banking, Financial Regulation and Supervision

After the Financial Crisis

Elgar original reference

Edited by Sylvester Eijffinger and Donato Masciandaro

This stimulating and original Handbook offers an updated and systematic discussion of the relationship between central banks, financial regulation and supervision after the global financial crisis.

Chapter 18: How Do Joint Supervisors Examine Financial Institutions? The Case of Banks

Marcelo Rezende

Subjects: economics and finance, financial economics and regulation, money and banking


18. How Do Joint Supervisors Examine Financial Institutions? The Case of State Banks Marcelo Rezende1 Introduction Banks in the United States are supervised by multiple regulators. Three federal regulators together with state banking departments supervise commercial banks and their powers and responsibilities often overlap. This fragmented regulatory structure has often been blamed for duplicating compliance costs, causing ineffective communication of information and motivating regulators to supervise and regulate institutions leniently. Supervisors, however, alleviate these inefficiencies by coordinating bank examinations. Federal supervisors are required to coordinate examinations with each other and with state banking departments to minimize the disruptive effects of multiple examinations on the operations of depository institutions.2 Banks themselves demand that supervisors cooperate too. In a recent survey, financial institutions in the United States recommended that, to reduce compliance costs, regulators increase collaboration and consistency among themselves and reduce the number of examinations where I thank Rosalind Bennett, Marc Escrihuela, David Jones, Edward Kane and seminar participants at the Central Bank of Brazil, EESP/FGV, Ibmec-Rio, IPEA-Rio, PUC-Rio, the University of São Paulo, the 2010 International Industrial Organization Conference and Finlawmetrics 2010 for comments. The views expressed herein are my own and do not necessarily reflect those of the Board of Governors or the staff of the Federal Reserve System. 2 See the Riegle Community Development and Regulatory Improvement Act of 1994. 531 1 532 The Architecture of Regulation and Supervision different regulators examine the same issue (Deloitte Center for Banking Solutions, 2007). Although most banks are jointly supervised,...

You are not authenticated to view the full text of this chapter or article.

Elgaronline requires a subscription or purchase to access the full text of books or journals. Please login through your library system or with your personal username and password on the homepage.

Non-subscribers can freely search the site, view abstracts/ extracts and download selected front matter and introductory chapters for personal use.

Your library may not have purchased all subject areas. If you are authenticated and think you should have access to this title, please contact your librarian.

Further information