
The Real but Exaggerated Threat of Financial Institution Mobility to Financial Regulation
Where jurisdictions differ in how they regulate an activity, migration allows private parties to choose between regulatory regimes. In the context of financial regulation, scholars assert that harmonization of regulation across jurisdictions is necessary to prevent institutions from opting into the laxest regulatory regime through relocation.[1] This assertion relies on two assumptions: (1) financial institutions indeed move in response to burdensome regulations, and (2) unilateral regulation is insufficient to achieve regulatory objectives with respect to offshore institutions. My recent project provides the first empirical evidence supporting that financial institutions relocate activities in response to derivatives regulation. Charges that unilateral … Read more