Improving Banking Supervision shows how greater market discipline can be used to help improve the quality of banks and their management in a world of increasing complexity, size and innovation. The book is based on research undertaken in the Nordic countries and New Zealand, and set in an international context through reference and comparison to the experiences of banks throughout the EU and the US. The authors show how traditional methods of regulation, particularly across borders face limits and can impose substantial costs on customers. They propose alternatives for today's international banks, based on a network of incentives to prudential behaviour and focusing on three main issues: - the development of transparent corporate structures - the public disclosure of comparable meaningful information so that markets can assess banks - the implementation of effective means to allow banks to exit without unacceptable costs to society

The book combines theoretical grounding and practical experience of the banking crises in Finland the success of the new regime in New Zealand, and the advice of the IMF

Introduction The Financial Crisis of the 1990s and its Lessons Challenges to Financial Supervision in Coming Years Principles of Good Financial Supervision Corporate Governance and Financial Stability The Rationale for a More Market-based Regime A Disclosure Regime Robust Exit Policies to Underpin Market Discipline A New Approach to Orderly Bank Exit Exit Policy Co-ordination at EU Level The Way Forward