Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/24095 
Year of Publication: 
2005
Series/Report no.: 
ZEW Discussion Papers No. 05-01
Publisher: 
Zentrum für Europäische Wirtschaftsforschung (ZEW), Mannheim
Abstract: 
Financial markets in Europe become more and more integrated. The persisting fragmentation of financial supervision, however, constitutes a lasting obstacle to integration. The aim of this paper is to assess these costs of supervisory fragmentation. We find clear evidence for the existence of economies of scale in banking supervision. An increase in supervisory output by one percent causes institutional supervisory cost to rise by only some 0.5 percent. Based on these estimation results we predict institutional cost saving of around 15 percent in a plausible simulation scenario representing a cost-efficient European supervisory framework.
Subjects: 
financial supervision
costs
economies of scale
JEL: 
G28
Document Type: 
Working Paper

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