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Uneven Regulatory Treatment Of Different Funded Positions – Regulatory Arbitrage Opportunity

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  • Ma³gorzata Karaœ

    (Warsaw School of Economics)

Abstract

Regulations treating in a diversified way different types of funded positions introduced over decades, do not take into consideration the increasing opportunities of financial innovation and regulatory arbitrage. These opportunities seem to significantly benefit the most sophisticated market agents, for whom this costly opportunity makes economic sense as they typically engage in gigantic transactions. However, the answer to the question of whether such a diversified system of regulations is socially desirable seems to be negative.

Suggested Citation

  • Ma³gorzata Karaœ, 2014. "Uneven Regulatory Treatment Of Different Funded Positions – Regulatory Arbitrage Opportunity," "e-Finanse", University of Information Technology and Management, Institute of Financial Research and Analysis, vol. 9(4), pages 48-52, April.
    • Handle: RePEc:rze:efinan:v:9:y:2014:i:4:p:48-52
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    References listed on IDEAS

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    1. Alan Greenspan, 1998. "The role of capital in optimal banking supervision and regulation," Economic Policy Review, Federal Reserve Bank of New York, vol. 4(Oct), pages 163-168.
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    More about this item

    Keywords

    Securities; funded positions; regulatory arbitrage Least Squares Method;
    All these keywords.

    JEL classification:

    • K22 - Law and Economics - - Regulation and Business Law - - - Business and Securities Law
    • G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation

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