A Risk Characterization of Regulatory Arbitrage in Financial Markets

European Business Organization Law Review ◽

10.1007/s40804-021-00219-x ◽

2021 ◽

Author(s):

Andrea Minto ◽

Stephanie Prinz ◽

Melanie Wulff

Keyword(s):

Financial Markets ◽

Financial Stability ◽

Policy Making ◽

Negative Impact ◽

Legal Analysis ◽

Risk Characterization ◽

Regulatory Arbitrage ◽

Ongoing Debate ◽

Public Health Literature

AbstractThis article analyses regulatory arbitrage in financial markets from a risk-based perspective. It assesses regulatory arbitrage in terms of the risk it may pose to the attainment of a regulatory objective, in this case financial stability. Its most distinct contribution to the literature is the application of the NOAEL approach—thus far mainly used in public health literature and regulatory toxicology—to the legal analysis and management of arbitrage risks. We propose several qualitative parameters relating to the likelihood of regulatory arbitrage and the negative impact if such arbitrage should occur. The article ultimately aims to help frame the ongoing debate about policy-making and the use of risk assessment methodologies to cope with regulatory arbitrage in financial markets.

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DEFINING “FINANCIAL STABILITY”

Polish Review of International and European Law ◽

10.21697/priel.2018.7.1.01 ◽

2019 ◽

Vol 7 (1) ◽

pp. 9

Author(s):

Stanisław Stefaniak

Keyword(s):

European Union ◽

Financial Markets ◽

Financial Stability ◽

Global Financial Crisis ◽

Central Banks ◽

Legal Analysis ◽

The European Union ◽

Policy Documents ◽

The Global Financial Crisis ◽

Financial Regulatory

After the Global Financial Crisis (GFC) of 2008 the term “financial stability” rose to prominence in financial regulatory circles. The paper employs methodological tools from political economy, discourse analysis and comparative legal analysis to track the trajectory of this rise in the narratives of scholarship on financial law, policy documents and relevant European legislation and finds that the meaning of the term is subject to change and malleable. It is argued that the substance of financial stability can only be deciphered once the broader ideas about the functioning of financial markets and roles of central banks are taken into context. It is then established that these ideas were redefined in the aftermath of the GFC in line with the new macroprudential paradigm, and how they came to inform subsequent policies and legislation in the European Union.

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Opportunities for improving the insider laws: A comparative analysis of the practice in the USA and Russia

Finance and Credit ◽

10.24891/fc.26.4.796 ◽

2020 ◽

Vol 26 (4) ◽

pp. 796-814

Author(s):

E.K. Ovakimyan

Keyword(s):

Financial Markets ◽

Insider Trading ◽

Negative Impact ◽

Business Environment ◽

Market Manipulation ◽

Insider Information ◽

Analysis And Synthesis ◽

The Usa ◽

Legislative Perfection ◽

Definition Of

Subject. The article examines the laws regulating insider trading. Objectives. The study outlines recommendations for refining Law On Countering the Illegal Use of Insider Information and Market Manipulation and Amendments to Some Legislative Acts of the Russian Federation, № 224-ФЗ of July 27, 2010. Methods. The methodological framework includes a general dialectical method, analysis and synthesis, induction and deductions, and some specific methods, such as comparative and formal logic analysis to specify the definition of insider information, structural logic and functional analysis to improve the mechanism for countering insider trading and market manipulation. Results. We discovered key drawbacks to be addressed so as to improve the business environment in Russia. Although the Russia laws mainly mirror the U.S. laws, they present a more extended list of terms concerning the insider information. I believe the legislative perfection should be continued. Conclusions and Relevance. The study helps apply the findings to outline a new legislative regulation or amend the existing ones, add a new mention on the course of financial markets to students’ books, develop new methods for detecting and countering and improving the existing ones. If all parties to insider relationships use the findings, they will prevent insider trading crimes in financial markets and (or) reduce the negative impact of such crimes on the parties.

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On the Major Differences between the Banking Systems of the EAEU States

Economics and Management ◽

10.35854/1998-1627-2020-4-397-406 ◽

2020 ◽

Vol 26 (4) ◽

pp. 397-406

Author(s):

T. E. Chekanova

Keyword(s):

Financial Stability ◽

Systems Approach ◽

Negative Impact ◽

Banking Regulation ◽

Member States ◽

Banking Systems ◽

Significant Negative Impact ◽

The Difference ◽

The Government ◽

Major Factors

The presented study examines the problems of integration of the national banking systems of the member states of the Eurasian Economic Union (EAEU).Aim. The study aims to examine the major differences in various aspects of functioning of banking systems in the EAEU member states in terms of their impact on integration processes.Tasks. The author identifies the most prominent features of the banking systems of the EAEU states; reveals the depth of the existing differences through a comparative analysis of various indicators of national banking systems; outlines ways of overcoming integration problems associated with differences in the banking sectors of the Union states.Methods. This study is based on universal general scientific methods and elements of comparative, functional, and economic analysis within the framework of a systems approach. The author uses regulatory documents and banking reports of the EAEU states, statistical and analytical materials of the Eurasian Economic Commission (EEC), and data of Moody’s international rating agency.Results. The study identifies a number of aspects that contain the major differences in the functioning of banking systems in the EAEU member states; highlights the disproportions in the scale, level of development, financial stability, and risks of the banking spheres of the Union states; comparatively analyzes the proportion of banking and non-banking structures in the system and the share of the government and non-resident companies in the capital of banks; marks the difference in the pricing of banking services; determines differences in the existing approaches to banking regulation and the established standards; analyzes the major differences in the legislative acts of the central banks and governments of the EAEU member states and in the terms and definitions used. According to the results of the study, the major factors hindering the development of integration processes between the banking systems of the EAEU states are identified.Conclusions. The existing differences between the banking systems of the EAEU countries are diverse and multifaceted. The author states that the aspects addressed in this study have a significant negative impact on the further development of integration processes, describing the major directions and actions of the member states aimed at minimizing the exiting differences, which are required to facilitate the convergence of the states and the transition towards a common financial market.

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EVALUATION OF FINANCIAL SECURITY OF THE REPUBLIC OF CRIMEA

Scientific Bulletin: finance, banking, investment. ◽

10.37279/2312-5330-2020-2-56-67 ◽

2020 ◽

pp. 56-67

Author(s):

Elena Evgenevna Mashyanova ◽

Elena Aleksandrovna Smirnova

Keyword(s):

Financial Markets ◽

Negative Impact ◽

Gradual Increase ◽

Financial System ◽

Financial Security ◽

Key Factors ◽

Factors Affecting ◽

External Threats ◽

The Republic ◽

Global Financial System

In modern conditions of development, financial security is an integral part of the overall security of the region and is formed on the basis of the functioning of the financial system. The complication of relationships between key segments of international financial markets, as well as the limited ability to accurately predict future trends in the development of the global financial system, lead to a gradual increase in the risks that accompany the activities of economic entities, and an increase in the number and scale of internal and external threats that have a negative impact on the financial security of the state. This formulation of the issue requires generalization of approaches to determining the financial security of the region in order to further formalize this issue and determine the key factors affecting it. The article considers the types of financial security, as well as certain areas of ensuring the financial security of the region and their priority. In work the assessment of the level of socio-economic development of the region with a view to ensuring financial security on the basis of which offers the main activities and priority areas of implementation of the investment policy that will ensure financial security of the Republic of Crimea.

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Human Effectiveness and Risk Characterization of the Electromuscular Incapacitation Device - A Limited Analysis of the TASER. Part 1. Technical Report

10.21236/ada434044 ◽

2005 ◽

Cited By ~ 2

Author(s):

Andrew Maier ◽

Patricia Nance ◽

Paul Price ◽

Clifford J. Sherry ◽

J. P. Reilly ◽

...

Keyword(s):

Risk Characterization ◽

Technical Report ◽

Human Effectiveness

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Exposure assessment and risk characterization of Aflatoxin M1 through consumption of market milk and milk products in Ludhiana, Punjab

Food Control ◽

10.1016/j.foodcont.2021.107991 ◽

2021 ◽

pp. 107991

Author(s):

Simranjot Kaur ◽

Jasbir Singh Bedi ◽

Pankaj Dhaka ◽

Deepthi Vijay ◽

Rabinder Singh Aulakh

Keyword(s):

Exposure Assessment ◽

Aflatoxin M1 ◽

Risk Characterization ◽

Milk Products

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Money growth variability and output: evidence with credit card-augmented Divisia monetary aggregates

Studies in Nonlinear Dynamics & Econometrics ◽

10.1515/snde-2019-0106 ◽

2020 ◽

Vol 24 (5) ◽

Author(s):

Jinan Liu ◽

Apostolos Serletis

Keyword(s):

Financial Stability ◽

Credit Card ◽

Negative Impact ◽

Balance Sheet ◽

Credit Cards ◽

Money Growth ◽

Monetary Policies ◽

Growth Variability ◽

Significant Negative Impact ◽

Growth Volatility

Abstract We reexamine the effects of the variability of money growth on output, raised by Mascaro and Meltzer (1983), in the era of the increasing use of alternative payments, such as credit cards. Using a bivariate VARMA, GARCH-in-Mean, asymmetric BEKK model, we find that the volatility of the credit card-augmented Divisia M4 monetary aggregate has a statistically significant negative impact on output from 2006:7 to 2019:3. However, there is no effect of the traditional Divisia M4 growth volatility on real economic activity. We conclude that the balance sheet targeting monetary policies after the financial crisis in 2007–2009 should pay more attention on the broad credit card-augmented Divisia M4 aggregate to address economic and financial stability.

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Heuristic biases in investment decision-making and perceived market efficiency

Qualitative Research in Financial Markets ◽

10.1108/qrfm-04-2017-0033 ◽

2018 ◽

Vol 10 (1) ◽

pp. 85-110 ◽

Cited By ~ 10

Author(s):

Syed Zulfiqar Ali Shah ◽

Maqsood Ahmad ◽

Faisal Mahmood

Keyword(s):

Financial Markets ◽

Market Efficiency ◽

Negative Impact ◽

Investment Decisions ◽

Sampling Technique ◽

Investment Strategy ◽

Individual Investors ◽

Content Type ◽

Specific Investment ◽

The Relationship

Purpose This paper aims to clarify the mechanism by which heuristics influences the investment decisions of individual investors, actively trading on the Pakistan Stock Exchange (PSX), and the perceived efficiency of the market. Most studies focus on well-developed financial markets and very little is known about investors’ behaviour in less developed financial markets or emerging markets. The present study contributes to filling this gap in the literature. Design/methodology/approach Investors’ heuristic biases have been measured using a questionnaire, containing numerous items, including indicators of speculators, investment decisions and perceived market efficiency variables. The sample consists of 143 investors trading on the PSX. A convenient, purposively sampling technique was used for data collection. To examine the relationship between heuristic biases, investment decisions and perceived market efficiency, hypotheses were tested by using correlation and regression analysis. Findings The paper provides empirical insights into the relationship of heuristic biases, investment decisions and perceived market efficiency. The results suggest that heuristic biases (overconfidence, representativeness, availability and anchoring) have a markedly negative impact on investment decisions made by individual investors actively trading on the PSX and on perceived market efficiency. Research limitations/implications The primary limitation of the empirical review is the tiny size of the sample. A larger sample would have given more trustworthy results and could have empowered a more extensive scope of investigation. Practical implications The paper encourages investors to avoid relying on heuristics or their feelings when making investments. It provides awareness and understanding of heuristic biases in investment management, which could be very useful for decision makers and professionals in financial institutions, such as portfolio managers and traders in commercial banks, investment banks and mutual funds. This paper helps investors to select better investment tools and avoid repeating expensive errors, which occur due to heuristic biases. They can improve their performance by recognizing their biases and errors of judgment, to which we are all prone, resulting in a more efficient market. So, it is necessary to focus on a specific investment strategy to control “mental mistakes” by investors, due to heuristic biases. Originality/value The current study is the first of its kind, focusing on the link between heuristics, individual investment decisions and perceived market efficiency within the specific context of Pakistan.

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The future of financial markets and regulation: what strategy for Europe?

foresight ◽

10.1108/fs-05-2012-0039 ◽

2014 ◽

Vol 16 (2) ◽

pp. 95-108 ◽

Cited By ~ 4

Author(s):

Jean-Baptiste Gossé ◽

Dominique Plihon

Keyword(s):

Financial Markets ◽

Capital Market ◽

Financial Stability ◽

Design Methodology ◽

Financial Integration ◽

Content Type ◽

Realistic Option ◽

The Future ◽

Unstable Environment ◽

Insight Into

Purpose – This article aims to provide insight into the future of financial markets and regulation in order to define what would be the best strategy for Europe. Design/methodology/approach – First the authors define the potential changes in financial markets and then the tools available for the regulator to tame them. Finally, they build five scenarios according to the main evolutions observed on the financial markets and on the tools used by the regulator to modify these trends. Findings – Among the five scenarios defined, two present highly unstable features since the regulator refuses to choose between financial opening and independently determining how to regulate finance in order to preserve financial stability. Three of them achieve financial stability. However, they are more or less efficient or feasible. In terms of market efficiency, the multi-polar scenario is the best and the fragmentation scenario is the worst, since gains of integration depend on the size of the new capital market. Regarding sovereignty of regulation, fragmentation is the best scenario and the multi-polar scenario is the worst, because it necessitates coordination at the global level which implies moving further away from respective national preferences. However, the more realistic option seems to be the regionalisation scenario: this level of coordination seems much more realistic than the global one; the market should be of sufficient size to enjoy substantial benefits of integration. Nevertheless, the “European government” might gradually increase the degree of financial integration outside Europe in line with the degree of cooperation with the rest of the world. Originality/value – Foresight studies on financial markets and regulation are quite rare. This may be explained by the difficulty to forecast what will be their evolution in the coming decades, not least because finance is fundamentally unstable. This paper provides a framework to consider what could be the best strategy of regulators in such an unstable environment.

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