TY  - UNPD
A1  - Haselmann, Rainer
A1  - Singla, Shikhar
A1  - Vig, Vikrant
T1  - Supranational supervision
N2  - We exploit the establishment of a supranational supervisor in Europe (the Single Supervisory Mechanism) to learn how the organizational design of supervisory institutions impacts the enforcement of financial regulation. Banks under supranational supervision are required to increase regulatory capital for exposures to the same firm compared to banks under the local supervisor. Local supervisors provide preferential treatment to larger institutes. The central supervisor removes such biases, which results in an overall standardized behavior. While the central supervisor treats banks more equally, we document a loss in information in banks’ risk models associated with central supervision. The tighter supervision of larger banks results in a shift of particularly risky lending activities to smaller banks. We document lower sales and employment for firms receiving most of their funding from banks that receive a tighter supervisory treatment. Overall, the central supervisor treats banks more equally but has less information about them than the local supervisor.
T3  - LawFin Working Paper - No. 50 
KW  - Financial Regulation
KW  - Financial Supervision
KW  - Banking Union
Y1  - 2022
UR  - http://publikationen.ub.uni-frankfurt.de/frontdoor/index/index/docId/68211
UR  - https://nbn-resolving.org/urn:nbn:de:hebis:30:3-682112
UR  - https://ssrn.com/abstract=4272923
N1  - The paper also benefited significantly from Shikhar Singla’s visit as a research fellow at the Center for Advanced Studies on the Foundations of Law and Finance at Goethe University, funded by the German Research Foundation (DFG) under the project FOR 2774.
PB  - Center for Advanced Studies on the Foundations of Law and Finance, House of Finance, Goethe University
CY  - Frankfurt am Main
ER  -