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Market Discipline and Conflicts of Interest Between Banks and Pension Funds

We study the behavior of private pension funds as large depositors in a banking system. Using panel data analysis, we examine whether, and if so how, pension funds influence market discipline in Argentina in the period 1998-2001. We find evidence that pension funds exert market discipline and this d...

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Bibliographic Details
Main Author: Barajas, Adolfo
Other Authors: Catalan, Mario
Format: eBook
Language:English
Published: Washington, D.C. International Monetary Fund 2011
Series:IMF Working Papers
Subjects:
Economic & Financial Crises & Disasters
Depository Institutions
Interest Rates
Commercial Banks
Banks
Pension Spending
Finance
Social Security And Public Pensions
Financial Crises
Banks And Banking
Financial Institutions
Financial Services
Micro Finance Institutions
Mortgages
Deposit Rates
Expenditure
Pensions
Banking Crises
Banking
Interest Rates: Determination, Term Structure, And Effects
Bank Deposits
Public Finance
Argentina
Online Access:
Collection: International Monetary Fund - Collection details see MPG.ReNa
Description
Summary:We study the behavior of private pension funds as large depositors in a banking system. Using panel data analysis, we examine whether, and if so how, pension funds influence market discipline in Argentina in the period 1998-2001. We find evidence that pension funds exert market discipline and this discipline gets stronger as the share of pension fund deposits in a bank rises. However, conflicts of interest undermine the disciplining role of pension funds. Specifically, pension funds allocate deposits to banks with weak fundamentals that own pension fund management companies. We conclude that forbidding banks' ownership of companies involved in pension fund management can enhance market discipline
Physical Description:44 pages
ISBN:9781463926632

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