The Effects of Supervision on Bank Performance: Evidence from Discontinuous Examination Frequencies

The Effects of Supervision on Bank Performance: Evidence from Discontinuous Examination Frequencies

This paper estimates causal effects of supervision on bank performance using discontinuities in the minimum frequency of examinations required by regulation. This frequency is discontinuous at a value of bank assets that varied over time, allowing us to break the endogeneity between supervision and performance and to separate the effects of examinations from confounding effects of other banking…

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