OVERVIEW

How do countries regulate and supervise their banks? Until recently, there was no comprehensive and official database on which one could draw to assess (1) the extent to which bank regulatory and supervisory regimes differ across a wide spectrum of countries, (2) what works best with regard to bank supervision and regulation, and (3) the determinants of different bank supervisory and regulatory choices around the world. Moreover, regulatory officials, especially those from high-income countries, have often taken the view that their choice of how to regulate and supervise their own banks was best for banks everywhere. This “policy hubris” is aided and abetted by a lack of a sufficiently comprehensive and detailed database with which to compare the practices of individual countries. Most importantly, the absence of such data prevents one from empirically testing any advice as to what a country should do to improve bank regulation and supervision and from assessing why countries adopt particular policies toward banks.