Abstract
We examine the effects of supervision activities and structure on the risk-adjusted performance of banking institutions. For a data set of 450 banks from 20 economies of Central Eastern Southern Eastern Europe, we employ the moderation analysis framework and find that the supervision structure affects the supervision activities. Especially, this is relevant for bank units with a status “too-big-to-fail” on the national level. Seemingly, supervision scrutiny does not affect their performance, and it is associated with lower riskiness. On the contrary, such an effect is negligible for bank units with lower capitalization. The findings highlight the area of attention for regulators and policymakers and thus contribute to the designing of effective supervision mechanisms.
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Notes
- 1.
List of countries in sample – EU members: Bulgaria, Croatia, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Slovakia and Slovenia. Other are non-EU members: Albania, Bosnia and Herzegovina, Kosovo, Macedonia and Serbia, and former Soviet Union independent states: Belarus, Moldova, Russia and Ukraine.
- 2.
Note: the minimum capital requirements may vary slightly across the countries and the period 2011–2016. The exact data for calculation are obtained from the World Bank – Bank Regulation and Supervision Survey
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Acknowledgements
This chapter is part of a project that has received funding from the European Union’s Horizon 2020 Research and Innovation Staff Exchange programme under the Marie Sklodowska-Curie grant agreement No.870245. We also acknowledge financial support from the Czech Science Foundation (grant 22-19617S). Views expressed represent exclusively the authors’ own opinions and do not necessarily reflect those of our institutions.
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Janda, K., Kravtsov, O. (2022). Financial Regulations, Supervision Structure and Banking Performance in CESEE. In: Procházka, D. (eds) Regulation of Finance and Accounting. ACFA ACFA 2021 2020. Springer Proceedings in Business and Economics. Springer, Cham. https://doi.org/10.1007/978-3-030-99873-8_1
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