Level Playing Fields in International Financial Regulation
Year: 2009
Type: article
Abstract: ABSTRACT We analyze the desirability of level playing fields in international financial regulation. In general, level playing fields impose the standards of the weakest regulator upon the best‐regulated economies. However, they may be desirable when capital is mobile because they counter a cherry‐picking effect that lowers the size and efficiency of banks in weaker economies. Hence, while a laissez faire policy favors the better‐regulated economy, level playing fields are good for weaker regulators. We show that multinational banking mitigates the cherry‐picking effect, and reduces the damage that a level playing field causes in the better‐regulated economy.
Source: The Journal of Finance
Authors: ALAN D. MORRISON, LUCY WHITE
Institutions: World Bank, Stockholm School of Economics, University of Oxford
Language: English
Subfield: Finance
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W2027101415