Bernardus Van Doornik

Economist, Central Bank Of Brazil
Photo by Adi Goldstein

Technological innovation in bank supervision: How SupTech disciplines bank risk-taking

Regulators increasingly rely on supervisory technologies to enhance bank supervision, yet their potential to discipline risky bank behaviour remains unclear. Using unique data from the Central Bank of Brazil, this article shows that after a ‘SupTech’ event, banks disclose inconsistencies in their risk reporting and tighten credit to less creditworthy firms, effectively reducing risk-taking.