1 Preliminary Draft Reforms of Financial Supervision Regimes and Central Banks: Exploring the Nexus

This paper assesses the nexus between the recent wave of financial supervision reforms and the role of central banks, reviewing six different views concerning the determinants of financial supervision architectures: economic view, market view, law view, political view, geography view and institutional view. The institutional view stresses the role of the existing rules of the game in explaining the features of the supervisory design, focusing on the role of central bank. The empirical tests provide first support for this view: in a setting characterized by a central bank traditionally less involved in supervision a unified model of supervision seems to be more likely to occur. The role of central bank involvement in supervision still holds when its level of monetary independence is taking in account. Furthermore, the probability that a country will move toward a unified model is higher: the smaller the overall size of the economy; when the legal framework is characterized by German and Scandinavian roots. Therefore also the economic size view and the law view matter