Regulatory Arbitrage and International Bank Flows
AbstractWe 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, that without a strong institutional environment, lax regulations are not enough to encourage massive capital flows.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Hong Kong Institute for Monetary Research in its series Working Papers with number 152012.
Length: 56 pages
Date of creation: May 2012
Date of revision:
Contact details of provider:
Postal: 55th Floor , Two International Finance Centre , 8 Finance Street , Central, Hong Kong
Phone: (852)2878 1978
Fax: (852)2878 7006
Web page: http://www.hkimr.org
More information through EDIRC
Other versions of this item:
- NEP-ALL-2012-06-05 (All new papers)
- NEP-BAN-2012-06-05 (Banking)
- NEP-CBA-2012-06-05 (Central Banking)
- NEP-IFN-2012-06-05 (International Finance)
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Buck, Florian & Schliephake, Eva, 2013. "The regulator’s trade-off: Bank supervision vs. minimum capital," Journal of Banking & Finance, Elsevier, Elsevier, vol. 37(11), pages 4584-4598.
- Can Bertay, A. & Demirgüc-Kunt, A. & Huizinga, H.P., 2011.
"Is the Financial Safety Net a Barrier to Cross-Border Banking?,"
Discussion Paper, Tilburg University, Center for Economic Research
2011-132, Tilburg University, Center for Economic Research.
- Bertay, Ata Can & Demirguc-Kunt, Asli & Huizinga, Harry, 2011. "Is the Financial Safety Net a Barrier to Cross-Border Banking?," CEPR Discussion Papers, C.E.P.R. Discussion Papers 8712, C.E.P.R. Discussion Papers.
- Bertay, Ata Can & Demirguc-Kunt Asli & Huizinga, Harry, 2012. "Is the financial safety net a barrier to cross-border banking ?," Policy Research Working Paper Series 5947, The World Bank.
- Müller, Oliver & Uhde, André, 2013. "Cross-border bank lending: Empirical evidence on new determinants from OECD banking markets," Journal of International Financial Markets, Institutions and Money, Elsevier, Elsevier, vol. 23(C), pages 136-162.
- Buck, Florian & Schliephake, Eva, 2012. "Political Economy of Banking Regulation," Annual Conference 2012 (Goettingen): New Approaches and Challenges for the Labor Market of the 21st Century 62018, Verein für Socialpolitik / German Economic Association.
- Pathan, Shams & Faff, Robert, 2013. "Does board structure in banks really affect their performance?," Journal of Banking & Finance, Elsevier, Elsevier, vol. 37(5), pages 1573-1589.
- Fang, Yiwei & Hasan, Iftekhar & Marton, Katherin, 2014. "Institutional development and bank stability: Evidence from transition countries," Journal of Banking & Finance, Elsevier, Elsevier, vol. 39(C), pages 160-176.
- Florian Buck & Eva Schliephake, 2012. "The Regulator's Trade-off: Bank Supervision vs. Minimum Capital," CESifo Working Paper Series 3923, CESifo Group Munich.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (HKIMR).
If references are entirely missing, you can add them using this form.