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The political economy of the G20 agenda on financial regulation

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  • Schuknecht, Ludger
  • Siegerink, Vincent

Abstract

The paper empirically examines the implementation record of international financial regulation of the banking sector. The study finds that the size of the banking sector and the presence of global systemically important banks (G-SIBs) are positively associated with a stronger implementation record. These results suggest that cooperative motives of internalising externalities, creating a level playing field and preserving financial stability play a role in explaining the implementation record. We find evidence that this cooperative behaviour may be driven by the self-interest of global players as the positive record is particularly strong in countries where large banking sectors and big banks are both present, and where regulation only applies to large players. Sectoral concentration, bank health and the share of foreign ownership yield more mixed results as regards their impact on implementation.

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  • Schuknecht, Ludger & Siegerink, Vincent, 2020. "The political economy of the G20 agenda on financial regulation," European Journal of Political Economy, Elsevier, vol. 65(C).
    • Handle: RePEc:eee:poleco:v:65:y:2020:i:c:s0176268020300896
    DOI: 10.1016/j.ejpoleco.2020.101941
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    2. Betz, Timm & Pond, Amy, 2023. "Democratic institutions and regulatory privileges for government debt," European Journal of Political Economy, Elsevier, vol. 79(C).
    3. Michael Sigmund, 2020. "The Capital Buffer Calibration for Other Systemically Important Institutions – Is the Country Heterogeneity in the EU caused by Regulatory Capture? (Michael Sigmund)," Working Papers 232, Oesterreichische Nationalbank (Austrian Central Bank).

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    More about this item

    Keywords

    Policy coordination; International public goods; Financial regulation; Rent seeking;
    All these keywords.

    JEL classification:

    • D70 - Microeconomics - - Analysis of Collective Decision-Making - - - General
    • F55 - International Economics - - International Relations, National Security, and International Political Economy - - - International Institutional Arrangements
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance

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