Template-Type: ReDIF-Paper 1.0

Author-Name: Andrey Sinyakov
Author-Email: SinyakovAA@cbr.ru
Author-Workplace-Name: Bank of Russia, Russian Federation

Author-Name: Alexey Ponomarenko
Author-Email: PonomarenkoAA@cbr.ru
Author-Workplace-Name: Bank of Russia, Russian Federation



Title: Proactive Supervisory Policy: Short-term Pain and Long-term Gain

Abstract: The study below studies long- and short-term effects of
proactive supervisory policy on various types of banks. Basing on a agent-based banking sector model, we compare the short- and long-term effects of two
supervisory policies with different degrees of stringency. The results show that the in the
short-term a stringent supervisory policy adversely affects small and medium-sized banks,
including those that comply with supervisory requirements.Yet, as the banking sector rehabilitates, the benefits from increasing trust in such banks
outweigh the short-term losses. Monopolism in the banking sector is reduced and price competition improved. 

Length: 14 pages
Creation-Date: 2017-07
Revision-Date:
Publication-Status:
File-URL: http://www.cbr.ru/Content/Document/File/124388/10.pdf
File-Format: Application/pdf
File-Function:
Number: note6
Classification-JEL: 
Keywords: agent-based model, competition in baning sector, banking supervision
Handle:RePEc:bkr:wpaper:note6