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Article: Regulatory Arbitrage and International Bank Flows
Title | Regulatory Arbitrage and International Bank Flows |
---|---|
Authors | |
Keywords | Regulatory Arbitrage International Bank Flow Financial Regulation |
Issue Date | 2012 |
Citation | Journal of Finance, 2012, v. 67 n. 5, p. 1845-1895 How to Cite? |
Abstract | We study whether cross-country differences in regulations have affected international bank flows. We find strong evidence that banks have transferred funds to markets with fewer regulations. This form of regulatory arbitrage suggests there may be a destructive “race to the bottom” in global regulations, which restricts domestic regulators’ ability to limit bank risk-taking. However, we also find that the links between regulation differences and bank flows are significantly stronger if the recipient country is a developed country with strong property rights and creditor rights. This suggests that, while differences in regulations have important influences, without a strong institutional environment, lax regulations are not enough to encourage massive capital flows. |
Persistent Identifier | http://hdl.handle.net/10722/192342 |
ISSN | 2023 Impact Factor: 7.6 2023 SCImago Journal Rankings: 19.139 |
SSRN | |
ISI Accession Number ID |
DC Field | Value | Language |
---|---|---|
dc.contributor.author | Houston, JF | en_US |
dc.contributor.author | Lin, C | en_US |
dc.contributor.author | Ma, Y | en_US |
dc.date.accessioned | 2013-10-24T01:50:04Z | - |
dc.date.available | 2013-10-24T01:50:04Z | - |
dc.date.issued | 2012 | en_US |
dc.identifier.citation | Journal of Finance, 2012, v. 67 n. 5, p. 1845-1895 | en_US |
dc.identifier.issn | 0022-1082 | en_US |
dc.identifier.uri | http://hdl.handle.net/10722/192342 | - |
dc.description.abstract | We study whether cross-country differences in regulations have affected international bank flows. We find strong evidence that banks have transferred funds to markets with fewer regulations. This form of regulatory arbitrage suggests there may be a destructive “race to the bottom” in global regulations, which restricts domestic regulators’ ability to limit bank risk-taking. However, we also find that the links between regulation differences and bank flows are significantly stronger if the recipient country is a developed country with strong property rights and creditor rights. This suggests that, while differences in regulations have important influences, without a strong institutional environment, lax regulations are not enough to encourage massive capital flows. | - |
dc.language | eng | en_US |
dc.relation.ispartof | Journal of Finance | en_US |
dc.rights | This is the accepted version of the following article: [Journal of Finance, 2012, v. 67 n. 5, p. 1845-1895], which has been published in final form at [http://dx.doi.org/10.1111/j.1540-6261.2012.01774.x]. In addition, authors may also transmit, print and share copies with colleagues, provided that there is no systematic distribution of the submitted version, e.g. posting on a listserve, network or automated delivery. | - |
dc.subject | Regulatory Arbitrage | - |
dc.subject | International Bank Flow | - |
dc.subject | Financial Regulation | - |
dc.title | Regulatory Arbitrage and International Bank Flows | en_US |
dc.type | Article | en_US |
dc.description.nature | postprint | - |
dc.identifier.doi | 10.1111/j.1540-6261.2012.01774.x | en_US |
dc.identifier.scopus | eid_2-s2.0-84866145049 | en_US |
dc.identifier.volume | 67 | en_US |
dc.identifier.issue | 5 | en_US |
dc.identifier.spage | 1845 | en_US |
dc.identifier.epage | 1895 | en_US |
dc.identifier.isi | WOS:000308651200008 | - |
dc.identifier.ssrn | 1525895 | - |
dc.identifier.issnl | 0022-1082 | - |