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Author Demirgüç-Kunt, Aslı, 1961-

Title Banking on the principles : compliance with Basel Core Principles and bank soundness / Asli Demirguc-Kunt, Enrica Detragiache, and Thierry Tressel
Published Washington, D.C. : International Monetary Fund, [2006]
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Description 1 online resource (33 pages) : illustrations
Series IMF working paper ; WP/06/242
IMF working paper ; WP/06/242
Summary This paper studies whether compliance with the Basel Core Principles for Effective Banking Supervision (BCPs) improves bank soundness. The authors find a significant and positive relationship between bank soundness (measured with Moody's financial strength ratings) and compliance with principles related to information provision2. Specifically, countries that require banks to regularly and accurately report their financial data to regulators and market participants have sounder banks. This relationship is robust to controlling for broad indexes of institutional quality, macroeconomic variables, sovereign ratings, and reverse causality. Measuring soundness through Z-scores yields similar results. These findings emphasize the importance of transparency in making supervisory processes effective and strengthening market discipline. Countries aiming to upgrade banking regulation and supervision should consider giving priority to information provision over other elements of the core principles
Bibliography Includes bibliographical references
Notes Print version record
Subject Basil Core Principles
Banks and banking -- State supervision.
Form Electronic book
Author Detragiache, Enrica.
Tressel, Thierry.
IMF Institute.
World Bank.
ISBN 1283511746
Other Titles Compliance with Basel Core Principles and bank soundness