Without a degree of similarity and convergence in bank resolution and contingent capital rules, regulatory arbitrage will work against establishing contingent capital as an integral part of financial markets.
Source quote, verbatim
Without a degree of similarity and convergence in bank resolution and contingent capital rules, regulatory arbitrage could have an adverse effect on establishing contingent capital as an integral part of financial markets.
Christoph K. Henkel, Wulf A. Kaal, Contingent Capital in European Union Bank Restructuring (2012). SSRN: https://ssrn.com/abstract=2061166
Holds when
absent international convergence of resolution and contingent capital rules
Classification
conditionsupport: arguedfailure: Regulatory arbitrage blocks contingent capital adoptionfamily: regulatory-arbitrageregulatory-failurecontingent-capitaleconomics
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