scholarly journals Foreign Investment, Regulatory Arbitrage, and the Risk of U.S. Banking Organizations

2019 ◽  
Vol 55 (3) ◽  
pp. 955-988 ◽  
Author(s):  
W. Scott Frame ◽  
Atanas Mihov ◽  
Leandro Sanz
Keyword(s):  
Banking Regulation ◽  
Internal Controls ◽  
Location Decisions ◽  
Regulatory Arbitrage ◽  
Holding Companies ◽  
Regulation And Supervision ◽  
Country Differences ◽  
Cross Country ◽  
Banking Regulation And Supervision

This study investigates the implications of cross-country differences in banking regulation and supervision for the international subsidiary locations and risk of U.S. bank holding companies (BHCs). We find that BHCs are more likely to operate subsidiaries in countries with weaker regulation and supervision and that such location decisions are associated with elevated BHC risk and higher contribution to systemic risk. The quality of BHCs’ internal controls and risk management plays an important role in these location choices and risk outcomes. Overall, our study suggests that U.S. banking organizations engage in cross-country regulatory arbitrage, with potentially adverse consequences.

2 The Limitations of Deposit Protection Systems

2015 ◽  
Author(s):  
Kleftouri Nikoletta
Keyword(s):  
Moral Hazard ◽  
Deposit Insurance ◽  
Banking Regulation ◽  
Internal Controls ◽  
Protection System ◽  
Market Incentives ◽  
Regulation And Supervision ◽  
Protection Systems ◽  
The Uk ◽  
Banking Regulation And Supervision

This chapter first analyses the moral hazard problem arising from the provision of deposit insurance. Moral hazard is a powerful force distorting market behaviour, which demands a variety of regulatory techniques, as well as market incentives, to neutralize its destabilizing effects. Corporate governance issues are also relevant, because banks’ internal controls and balances have a key impact on the extent of moral hazard. In addition to a well-designed deposit protection system, it is necessary to enlist the support of banking regulation and supervision to combat moral hazard. Drawing on the UK deposit protection system, the chapter presents a number of ambiguities inherent to the design and functions of a deposit guarantee scheme. It concludes that the existence of effective prudential regulation and supervision are prerequisites for deposit insurance.

Earnings Management within Multinational Corporations

2018 ◽  
Vol 94 (4) ◽  
pp. 45-76 ◽  
Author(s):  
Christof Beuselinck ◽  
Stefano Cascino ◽  
Marc Deloof ◽  
Ann Vanstraelen
Keyword(s):  
Earnings Management ◽  
Multinational Corporations ◽  
Home Country ◽  
Institutional Quality ◽  
Regulatory Arbitrage ◽  
Arbitrage Opportunities ◽  
Country Differences ◽  
Cross Country ◽  
Jel Classifications

ABSTRACT Using a large sample of multinational corporations (MNCs), we examine the location of earnings management within the firm. We posit and find that MNCs manage their consolidated earnings through an orchestrated reporting strategy across subsidiaries over which they exert significant influence. Specifically, we find that headquarters' influence on subsidiary earnings management increases with the degree of subsidiary integration and the extent of earnings management opportunities. Most importantly, we provide evidence that MNCs exploit regulatory arbitrage opportunities arising from cross-country differences in institutional quality. We document that, in response to exogenous improvements in the quality of their home-country institutions, MNCs rebalance their reporting strategies by clustering earnings management in subsidiaries from countries with more lenient regulations. Taken together, our findings yield important insights on the drivers of earnings management location within the firm and highlight the need for better cross-country coordination in regulatory design. JEL Classifications: F23; G15; G34; G38; M41; M48.

Banking regulation and supervision: lessons from the czech republic

1998 ◽  
Vol 7 (1) ◽  
Author(s):  
Roman Matoušek
Keyword(s):  
Banking Sector ◽  
Banking System ◽  
Present Situation ◽  
Banking Regulation ◽  
Banking Supervision ◽  
The Czech Republic ◽  
Regulation And Supervision ◽  
Banking Regulation And Supervision ◽  
Remarkable Progress ◽  
Made In

We have concentrated on the current issues linked to the goals of banking regulation and supervision. Attention has been focused mainly on the problem of entry into and exit form the banking sector and the institutional framework banking supervision as a whole. Although we are aware that the present situation in emerging markets is far from that of standard economies, we argue that remarkable progress has been made in creating an appropriate banking system since the beginning of the 1996.

scholarly journals Human Capital and the Wealth of Nations

2014 ◽  
Vol 104 (9) ◽  
pp. 2736-2762 ◽  
Author(s):  
Rodolfo E. Manuelli ◽  
Ananth Seshadri
Keyword(s):  
Human Capital ◽  
Demographic Variables ◽  
Factor Productivity ◽  
Rates Of Return ◽  
Capital Theory ◽  
Country Differences ◽  
Cross Country ◽  
Wealth Of Nations

We reevaluate the role of human capital in determining the wealth of nations. We use standard human capital theory to estimate stocks of human capital and allow the quality of human capital to vary across countries. Our model can explain differences in schooling and earnings profiles and, consequently, estimates of Mincerian rates of return across countries. We find that effective human capital per worker varies substantially across countries. Cross-country differences in Total Factor Productivity (TFP) are significantly smaller than found in previous studies. Our model implies that output per worker is highly responsive to changes in TFP and demographic variables. (JEL E23, I25, J24, J31, O47)

scholarly journals Protection of the Rights of Individual Depositors in Ukrainian Banking Market

2016 ◽  
Vol 3 (1) ◽  
pp. 83-96
Author(s):  
Sophia Lobozynska
Keyword(s):  
Financial Literacy ◽  
Complex Analysis ◽  
Banking Regulation ◽  
Protection System ◽  
Financial Sustainability ◽  
Legal Norms ◽  
Regulation And Supervision ◽  
Banking Market ◽  
Banking Regulation And Supervision

The complex analysis of deposit operations of individuals in Ukraine was realized. The national legal norms of protection the rights of investors – individuals were investigated. Also the proposals were developed for the further improvement of the protection system of individual depositor rights in Ukraine by improving banking regulation and supervision, the increase of the financial sustainability of the Deposit Guarantee Fund and financial literacy of citizens.

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