This paper, authored by James R. Barth, Gerard Caprio, Jr., and Ross Levine, examines the relationship between bank regulation and supervision practices and the development, performance, and stability of banking sectors in 107 countries. The authors use a newly assembled database to assess various regulatory and supervisory practices, including restrictions on bank activities, entry regulations, capital adequacy requirements, deposit insurance systems, supervisory power, and government ownership. The findings suggest that policies that promote accurate information disclosure, empower private-sector corporate control, and foster incentives for private agents to exert corporate control are most effective in promoting bank development, performance, and stability. The paper also highlights the limitations of existing theoretical models and the importance of considering the interrelated nature of regulatory and supervisory policies. Overall, the study provides empirical evidence on the effectiveness of different regulatory and supervisory practices and their impact on banking sectors worldwide.This paper, authored by James R. Barth, Gerard Caprio, Jr., and Ross Levine, examines the relationship between bank regulation and supervision practices and the development, performance, and stability of banking sectors in 107 countries. The authors use a newly assembled database to assess various regulatory and supervisory practices, including restrictions on bank activities, entry regulations, capital adequacy requirements, deposit insurance systems, supervisory power, and government ownership. The findings suggest that policies that promote accurate information disclosure, empower private-sector corporate control, and foster incentives for private agents to exert corporate control are most effective in promoting bank development, performance, and stability. The paper also highlights the limitations of existing theoretical models and the importance of considering the interrelated nature of regulatory and supervisory policies. Overall, the study provides empirical evidence on the effectiveness of different regulatory and supervisory practices and their impact on banking sectors worldwide.