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Addressing Information Asymmetry between Banks and Regulators: Role of Peer Monitoring

This discussant paper examines the role of peer monitoring in minimizing information asymmetry between banks and regulators. It discusses mechanisms to reduce market failures and highlights the potential of market discipline to improve regulatory capacity in assessing market stability.

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Addressing Information Asymmetry between Banks and Regulators: Role of Peer Monitoring

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  1. Addressing the Information Asymmetry between Banks and Regulators: The Role of Peer Monitoring Discussant Paper Dalvinder Singh, Professor of Law, University of Warwick

  2. Regulation and SupervisionInformation Flow: Minimise Market Failures

  3. Mechanisms to Reduce the Asymmetry of Information

  4. Market Discipline fits Mic-Pru-Sup and Mac-Pru-Sup approaches

  5. Markus Brunnermeier et al. 2009

  6. Concluding Observations • The paper by Murinde et al highlights the pro’s and con’s of utilising market discipline to minimise the agency problems associated with asymmetry of information between banks, regulators and markets • It points towards improving the use of market discipline to develop the capacity of regulators to better inform themselves about the stability of the market place

  7. dalvinder.singh@warwick.ac.uk

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