I would like to thank Matthew Willison, Hugh Burns, Nicolo Fraccaroli and David Swallow for their assistance in preparing these remarks 11  References Antoniades, A and Calomiris, C W (2018), ‘Mortgage market credit conditions and US presidential elections’, NBER Working Paper 24459. Agarwal, S, Lucca, D, Seru, A, and Trebbi, F (2014), ‘Inconsistent regulators: evidence from banking’, Quarterly Journal of Economics, vol.129, pages 889-938. Barth, J R, Lin, C, Ma, Y, Seade, J, and Song, F M (2013b), ‘Do bank regulation, supervision and monitoring enhance or impede bank efficiency?’, Journal of Banking & Finance, Vol.37(8), pages 2879-2892. Barth, J R, Caprio, G and Levine, R (2013), ‘Bank regulation and supervision in 180 countries from 1999 to 2011’, NBER Working Paper 18733. Ben-David, I, Cerulli, G, Fiordelisi, F, and Marquez-Ibanez, D (2018), ‘Seeking my supervisor: evidence from the centralization of banking supervision in Europe’, Mimeo. Bodea, C and Hicks, R (2015), ‘Price stability and central bank independence: discipline, credibility, and democratic institutions’, International Organization, Vol.69(1), pages 35-61. Dagher, J (2018), ‘Regulatory cycles: revisiting the political economy of financial crises’, IMF Working Paper WP/18/8 Dincer, N N and Eichengreen, B (2012), ‘The architecture and governance of financial supervision: sources and implications’, International Finance, Vol.15(3), pages 309-25. Fraccaroli, N, Sowerbutts, R, and Whitworth, A (2019), ‘Does regulatory and supervisory independence affect financial stability’, Forthcoming. Garriga, A C (2016), ‘Central bank independence in the world: a new data set’, International Interactions, Vol.42(5), pages 849-68.
For example if the international standards are not designed with certain business models in mind, to reflect the advance of new technologies and to reflect new risks and opportunities. I have spoken at length elsewhere about the benefits of dynamism, so will not dwell on this more here.4  The second feature the institutional structure should have is time consistency. Time consistency is perhaps best understood by describing its opposite, time inconsistency. Public policy suffers from time inconsistency when there is a conflict between a policymaker’s shortterm incentives and their long-term incentives. In the context of prudential regulation, over the long run, a policymaker wants to avoid financial crises. Robust prudential standards are the means of achieving this. In the short term, however, there may be benefits from weakening prudential standards. For instance, a government might benefit electorally from the resulting short-term boost to credit supply. There is empirical evidence for this happening in practice. 5  But the long-term consequence of always acting on those short-term incentives is an unstable financial system. The benefits of time consistency have been long recognised in monetary policy. Finally, the structure will need to have legitimacy. 3  https://www.bankofengland.co.uk/speech/2019/sam-woods-ubs-20th-annual-financial-institutions-conference-lausanne. See https://www.bankofengland.co.uk/speech/2018/victoria-saporta-speech-at-the-westminster-business-forum-keynoteseminar and https://www.bankofengland.co.uk/speech/2019/victoria-saporta-speech-at-risk-net-liquidity-and-funding-riskeurope . 5 See Antoniades and Calomiris (2018) and Dagher (2018). 4  I would like to thank Matthew Willison, Hugh Burns, Nicolo Fraccaroli and David Swallow for their assistance in preparing these remarks 3  To achieve this, the regulatory authority needs to be given a mandate.