Frantz, Pascal 
ORCID: 0009-0005-3394-0589 and Instefjord, Norvald
(2012)
Financial regulation: regulatory arbitrage and regulatory harmonization.
.
Social Science Research Network.
Abstract
This paper analyzes the problem of designing optimal financial regulation when regulatory arbitrage allows competition from other regulators, and whether regulatory harmonization as a means to curb regulatory arbitrage is desirable. We find (i) that regulatory arbitrage and competition matter in the sense that the optimal autarky approach to regulation may not be optimal in open economies; (ii) regulatory arbitrage that takes place in equilibrium is not as important as the possibility of regulatory arbitrage and the associated impact on regulatory competition; and (iii) regulatory diversity can be welfare optimal even though it leads to more regulatory arbitrage activity than regulatory harmonization.
| Item Type: | Monograph (Working Paper) |
|---|---|
| Official URL: | http://papers.ssrn.com/ |
| Additional Information: | © 2012 The Authors |
| Divisions: | Accounting |
| Subjects: | H Social Sciences > HB Economic Theory H Social Sciences > HF Commerce > HF5601 Accounting |
| JEL classification: | G - Financial Economics > G2 - Financial Institutions and Services > G28 - Government Policy and Regulation |
| Date Deposited: | 10 Aug 2012 10:41 |
| Last Modified: | 11 Dec 2024 19:07 |
| URI: | http://eprints.lse.ac.uk/id/eprint/45326 |
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