Reint Gropp, Thomas Mosk, Steven Ongena, Ines Simac, Carlo Wix, 14 February 2021

The implementation of supranational regulations at the national level often provides national authorities with substantial room to engage in discretion and forbearance. Using evidence from a supranational increase in bank capital requirements, this column shows that national authorities may assist banks' efforts to inflate their regulatory capital to pass such supranational requirements. While supranational rules should be binding in theory, national discretion may effectively undermine them in practice.

Thorsten Beck, Wolf Wagner, 20 July 2013

The proper level for bank supervision is mired in detail. This column argues that the higher the cross-border externalities and the lower the country heterogeneity, the more likely supranational regulation is desirable. This framework informs the various initiatives for improving cross-border supervision, including a better understanding of the sources of political-economy constraints that so frequently are an obstacle to integration.

CEPR Policy Research