The results show that the independence index does not have a statistically significant effect on bank efficiency contemporaneously or lagged by one year. Second, they used the loan growth rate as a dependent variable. The result is similar: the index does not have a statistically similar effect on loan growth. These results differ somewhat from others have found. Dincer and Eichengreen (2013) find when the supervisor is independent some measures of bank credit are lower. In contrast, Barth et al (2013b) find supervisory independence is associated with higher bank efficiency. Table 4: Results for regressions of a bank efficiency ratio or loan growth on the RegulatorySupervisory Independence Index Dependent variable Bank efficiency ratio (a)  Loan growth rate  Regulatory-Supervisory Independence  1.083  0.027  Index  (0.992)  (0.022)  Regulatory-Supervisory Independence  0.155  0.004  Index lagged by one year  (0.367)  (0.015)  Observations  30,698  30,698  Adjusted R2  0.737  0.105  (a) Defined as (non-interest expense before foreclosed property expense + amortisation of intangibles + goodwill impairments) as a percentage of (net interest income + non-interest income). Conclusion  In this speech, I have set out a framework for thinking about ideal post-EU institutional structure. The ideal model involves independent regulators with mandates. The evidence backs that independence of prudential regulation increases financial stability with no cost to efficiency.
But it would have meant putting the whole of the economy, including the exposed sectors, at risk of accelerating inflation, and it would in all probability have meant a much sharper downturn in the economy as a whole a little further ahead. We’ve been round that buoy all too often before. And so we tightened policy, trying as best as we could through our tactics to minimise the unwanted upward pressure on the exchange rate. I know, Chairman, only too well that this will be cold comfort to many of you in the exposed sectors - but there’s no point in pretending things are other than they are. The present imbalance means that we are trying to maintain stability in extraordinarily difficult circumstances. But I will make one final point. The inflation target we have been set is symmetrical. A significant, sustained, fall below 2½% is to be regarded just as seriously as a significant, sustained, rise above it. And I give you my assurance that we will be just as rigorous in cutting interest rates if the overall evidence begins to point to our undershooting the target as we have been in raising them when the balance of risks was on the upside. There is now evidence that domestic demand growth is moderating, as it must do, and that the labour market is tightening more slowly than before.