Published online by Cambridge University Press: 04 October 2011
We offer three basic mechanisms to improve the governance of ‘normal times’ financial supervisors (as opposed to resolution agencies and systemic risk boards). To enhance supervisory effectiveness, we propose first to institutionalise strong CEOs, with boards or commissions being limited to basic policy decision-making and to monitoring. Second, lower-level staff would get increased line responsibilities. Finally, subjecting supervisors to reinforced disclosure requirements would improve market responsiveness.