The views expressed in this chapter should not be attributed to either the Monetary and Exchange Affairs Department or the International Monetary Fund.
The main examples are Singapore and the Netherlands Antilles.
3 The Finnish model of financial regulation deserves study by many of the smaller transition economies. Under this system banking and securities regulation is combined in the Financial Supervisory Agency which, although legally separate from the central bank, has close administrative links with it (its staff are central bank employees, for example, and it shares the central bank's computer systems). Insurance and pensions regulation is the responsibility of a separate agency, the Insurance Supervisory Agency. For a more extensive description see Taylor and Fleming (1999). 4
It should be noted, however, that the prompt corrective action provisions are tied to the level of a bank's capitalization; hence if the calculation of a bank's capitalization cannot be accurately performed, the use of prompt corrective action will be inhibited. Establishing the true level of a bank's capital adequacy is a problem in many transition and emerging economies, and should be seen as a necessary preliminary to the adoption of a prompt corrective action technique.
C. Briault, The rationale for a single national financial services regulator (London: Financial Services Authority, Occasional Paper No. 2, 1999).
Central Banking Publications, ‘How Countries Supervise their Securities Markets, Banks and Insurers’, (London: Central Banking Publications, 1999).
D. Folkerts-Landau and C. Lindgren, Toward a Framework for Financial Stability (Washington, DC: International Monetary Fund, 1998).
G. Garcia, ‘Deposit Insurance: obtaining the benefits and avoiding the pitfalls’ (Washington, DC: International Monetary Fund Working Paper WP/96/83, 1996).
C. Goodhart and D. Schoenmaker, ‘Institutional separation between supervisory and monetary agencies’, Giornale Degli Economisti E Annali Di Economia (Italy), Vol. 51 (September–December 1992).
S. Jacobs, ‘The Second Generation of Regulatory Reforms’ (paper delivered at the IMF Conference on Second Generation Reforms, 8–9 November 1999, available at the IMF website: www.imf.org).
J. Kornai, The Socialist System (Oxford: Oxford University Press, 1992).
G. Majone, ‘Controlling Regulatory Bureaucracies: Lessons from the American Experience’, EUI Working Papers in Political and Social Sciences (European University Institute, Florence, Italy, 1993).
A. C. Pigou, The Economics of Welfare (London: Macmillan and Co. 1946 ).
A. Shleifer and R. Vishny, The Grabbing Hand (Cambridge, MA: Harvard University Press, 1998).
G. Stigler, Chicago studies in political economy (Chicago: University of Chicago Press, 1988).
Questia, a part of Gale, Cengage Learning. www.questia.com
Book title: Transitional Economies:Banking, Finance, Institutions.
Contributors: Yelena Kalyuzhnova - Editor, Michael Taylor - Editor.
Place of publication: New York.
Publication year: 2001.
Page number: 243.
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