01807cas a2200253 a 4500 AALejournalIMF011431 230101c9999 xx r poo 0 0eng d 5.00 USD 9781463926632 1018-5941 BD-DhAAL BD-DhAAL Barajas, Adolfo. Market Discipline and Conflicts of Interest Between Banks and Pension Funds / Adolfo Barajas, Mario Catalan. Washington, D.C. : International Monetary Fund, 2011. 1 online resource (44 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students We study the behavior of private pension funds as large depositors in a banking system. Using panel data analysis, we examine whether, and if so how, pension funds influence market discipline in Argentina in the period 1998-2001. We find evidence that pension funds exert market discipline and this discipline gets stronger as the share of pension fund deposits in a bank rises. However, conflicts of interest undermine the disciplining role of pension funds. Specifically, pension funds allocate deposits to banks with weak fundamentals that own pension fund management companies. We conclude that forbidding banks' ownership of companies involved in pension fund management can enhance market discipline. Mode of access: Internet Catalan, Mario. IMF Working Papers; Working Paper ; No. 2011/282 Full text available on IMF http://elibrary.imf.org/view/journals/001/2011/282/001.2011.issue-282-en.xml IMF e-Library