IDEAS home Printed from https://ideas.repec.org/p/osf/lawarc/7k5nv_v1.html

Fiscal and Foreign Relations Dimensions of Financial Stability Regulation

Author

Listed:
  • Beylin, Ilya

Abstract

Lawmakers face a conflict of interest in crafting financial stability regulation. In the course of regulating areas such as capital, margin, stablecoins and money market funds, lawmakers specify the relative desirability of various assets, including sovereign debt. Ideally, lawmakers would calibrate these rules based on the risk these assets pose. However, in practice, calibration may account for fiscal considerations, i.e., encouraging the financial system to absorb sovereign debt. This Article explores this conflict of interest. For example, it criticizes U.S. banking regulators’ approach of applying zero risk weights to all high-income Organisation for Economic Co-operation and Development (OECD) countries’ sovereign debt. It also questions why U.S. derivatives clearinghouses have stringent collateral rules that privilege U.S. government debt. Normatively, the Article makes modest suggestions towards insulating financial stability regulation from bias that may be injected on the basis of fiscal considerations.

Suggested Citation

  • Beylin, Ilya, 2026. "Fiscal and Foreign Relations Dimensions of Financial Stability Regulation," LawArchive 7k5nv_v1, Center for Open Science.
    • Handle: RePEc:osf:lawarc:7k5nv_v1
    DOI: 10.31228/osf.io/7k5nv_v1
    as

    Download full text from publisher

    File URL: https://osf.io/download/6ac7e87950aeb5815af7cd87/
    Download Restriction: no
    File URL: https://libkey.io/10.31228/osf.io/7k5nv_v1?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:osf:lawarc:7k5nv_v1. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: OSF (email available below). General contact details of provider: https://lawarchive.info/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.