The ‘Twin Peaks’ model of post-crisis banking supervision

Abstract

This article examines the effectiveness of the ‘Twin Peaks’ supervision model, in which consumer protection and prudential regulation are carried out by two separate regulatory agencies. We use a dataset from 143 countries for the period of 2004–2011 to find that the Twin Peaks model is associated with a higher quality of banking supervision in terms of the efficiency and stability of financial institutions. © 2016 Informa UK Limited, trading as Taylor & Francis Group.