Publication detail

Coordination Incentives in Cross-Border Macroprudential Regulation

Author(s): RNDr. Alexis Derviz CSc.,
PhDr. Jakub Seidler Ph.D.,
Type: IES Working Papers
Year: 2012
Number: 21
ISSN / ISBN:
Published in: IES Working Papers 21/2012
Publishing place: Prague
Keywords: macroprudential regulation, integration, autonomy, information, reporting
JEL codes: F55; H77; D02; C72; D83
Suggested Citation: Derviz, A., Seidler, J. (2012). “Coordination Incentives in Cross-Border Macroprudential Regulation” IES Working Paper 21/2012. IES FSV. Charles University.
Abstract: We discuss (dis)incentives for fair cooperation related to delegating macroprudential policy decisions to a supranational body, as well as their welfare implications. The question is studied by means of a signaling game of imperfect information between two national regulators. The model concentrates on informational frictions in an environment with otherwise fully aligned preferences. We show that even in the absence of evident conflicting goals, the non-transferrable nature of some regulatory information creates misreporting incentives. However, the major problem is not the reporting accuracy but the institutional arrangement focused on maximal multilateral satisfaction to the detriment of credible enforcement of rules. The main application is meant to be systemic risk management by the relevant EU institutions.
Downloadable: WP_2012_21_Derviz_Seidler

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