Book contents
- A Regulatory Design for Financial Stability in Hong Kong
- A Regulatory Design for Financial Stability in Hong Kong
- Copyright page
- Contents
- Acknowledgments
- Abbreviations
- 1 Introduction
- Part I A Financial History of Hong Kong
- Part II The Regulatory Models of Financial Supervision
- 4 The Sectoral Supervisory Model
- 5 Integrated, Twin Peaks, and Systemic Risk Supervision for Financial Stability
- Part III Contemporary Regulatory and Supervisory Approaches
- Part IV Banking Regulation and Supervision in Hong Kong
- Part V Resolution Regimes and Crisis Management Mechanisms
- Part VI Financial Market Integration with the Mainland
- Index
5 - Integrated, Twin Peaks, and Systemic Risk Supervision for Financial Stability
from Part II - The Regulatory Models of Financial Supervision
Published online by Cambridge University Press: 25 August 2022
- A Regulatory Design for Financial Stability in Hong Kong
- A Regulatory Design for Financial Stability in Hong Kong
- Copyright page
- Contents
- Acknowledgments
- Abbreviations
- 1 Introduction
- Part I A Financial History of Hong Kong
- Part II The Regulatory Models of Financial Supervision
- 4 The Sectoral Supervisory Model
- 5 Integrated, Twin Peaks, and Systemic Risk Supervision for Financial Stability
- Part III Contemporary Regulatory and Supervisory Approaches
- Part IV Banking Regulation and Supervision in Hong Kong
- Part V Resolution Regimes and Crisis Management Mechanisms
- Part VI Financial Market Integration with the Mainland
- Index
Summary
Supervisory models evolve with financial markets. To address the evolution of financial markets and institutions, new supervisory structures have been developed. This chapter analyzes systemic supervision under the integrated, functional, and Twin Peaks models, and systemic composite bodies to elucidate their strengths and weaknesses when managing financial stability. Models examined cover those in Hong Kong, Mainland China, the United States, United Kingdom, Singapore, Australia, South Africa, and the Netherlands. Systemic oversight between traditional central banks and integrated micro-prudential supervisors is subject to supervisory underlap. This was the core weakness of the United Kingdom’s integrated model and is a regulatory flaw inherent to the institutional, sectoral, and functional models. Composite systemic bodies are imperative for supervisory models consisting of central banks that are not unified with prudential supervisors or divided among multiple supervisors. The Twin Peaks model does not need a composite systemic body because this is the role of the systemic peak supervisor. Neither does a unified fully integrated supervisor because the role is internalized. However, competing objectives within a fully integrated supervisor can produce bias and conflicts, eroding systemic supervision and financial stability.
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- Information
- A Regulatory Design for Financial Stability in Hong Kong , pp. 71 - 90Publisher: Cambridge University PressPrint publication year: 2022