TY - BOOK ID - 138129509 TI - Supervisory Incentives in a Banking Union AU - Carletti, Elena. AU - Dell'Ariccia, Giovanni. AU - Marquez, Robert. PY - 2016 SN - 1475537638 PB - Washington, D.C. : International Monetary Fund, DB - UniCat KW - Financial services industry. KW - United States KW - Banks and Banking KW - Exports and Imports KW - Industries: Financial Services KW - Banks KW - Depository Institutions KW - Micro Finance Institutions KW - Mortgages KW - Financial Institutions and Services: Government Policy and Regulation KW - Institutions: Design, Formation, and Operations KW - Financial Institutions and Services: General KW - Current Account Adjustment KW - Short-term Capital Movements KW - Investment Banking KW - Venture Capital KW - Brokerage KW - Ratings and Ratings Agencies KW - Banking KW - Finance KW - Financial services law & regulation KW - Distressed institutions KW - Portfolio investment KW - Bank supervision KW - Commercial banks KW - Financial institutions KW - Balance of payments KW - Financial regulation and supervision KW - Investment banking KW - Financial services KW - Banks and banking KW - Financial services industry KW - Portfolio management KW - State supervision UR - https://www.unicat.be/uniCat?func=search&query=sysid:138129509 AB - We explore the behavior of supervisors when a centralized agency has full power over all decisions regarding banks, but relies on local supervisors to collect the information necessary to act. This institutional design entails a principal-agent problem between the central and local supervisors if their objective functions differ. Information collection may be inferior to that under fully independent local supervisors or under centralized information collection. And this may increase risk-taking by regulated banks. Yet, a “tougher” central supervisor may increase regulatory standards. Thus, the net effect of centralization on bank risk taking depends on the balance of these two effects. ER -