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Article: Regulatory Arbitrage and International Bank Flows

TitleRegulatory Arbitrage and International Bank Flows
Authors
KeywordsRegulatory Arbitrage
International Bank Flow
Financial Regulation
Issue Date2012
Citation
Journal of Finance, 2012, v. 67 n. 5, p. 1845-1895 How to Cite?
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, without a strong institutional environment, lax regulations are not enough to encourage massive capital flows.
Persistent Identifierhttp://hdl.handle.net/10722/192342
ISSN
2015 Impact Factor: 5.105
2015 SCImago Journal Rankings: 14.546
SSRN
ISI Accession Number ID

 

DC FieldValueLanguage
dc.contributor.authorHouston, JFen_US
dc.contributor.authorLin, Cen_US
dc.contributor.authorMa, Yen_US
dc.date.accessioned2013-10-24T01:50:04Z-
dc.date.available2013-10-24T01:50:04Z-
dc.date.issued2012en_US
dc.identifier.citationJournal of Finance, 2012, v. 67 n. 5, p. 1845-1895en_US
dc.identifier.issn0022-1082en_US
dc.identifier.urihttp://hdl.handle.net/10722/192342-
dc.description.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, without a strong institutional environment, lax regulations are not enough to encourage massive capital flows.-
dc.languageengen_US
dc.relation.ispartofJournal of Financeen_US
dc.rightsCreative Commons: Attribution 3.0 Hong Kong License-
dc.rightsThis 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.subjectRegulatory Arbitrage-
dc.subjectInternational Bank Flow-
dc.subjectFinancial Regulation-
dc.titleRegulatory Arbitrage and International Bank Flowsen_US
dc.typeArticleen_US
dc.description.naturepostprint-
dc.identifier.doi10.1111/j.1540-6261.2012.01774.xen_US
dc.identifier.scopuseid_2-s2.0-84866145049en_US
dc.identifier.volume67en_US
dc.identifier.issue5en_US
dc.identifier.spage1845en_US
dc.identifier.epage1895en_US
dc.identifier.isiWOS:000308651200008-
dc.identifier.ssrn1525895-

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