Uneven Regulatory Playing Field and Bank Transparency Abroad

Tai-yuan Chen ()
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Tai-yuan Chen: Associate Dean of Business and Management, Professor, Department of Accounting

No 2020-37, HKUST IEMS Thought Leadership Brief Series from HKUST Institute for Emerging Market Studies

Abstract: Restrictive home-country regulations lead to degraded transparency abroad and exert negative externalities on the global banking system. Our finding that the negative externalities primarily exist in countries with weak supervisory power highlights the importance of bank supervision when regulators consider using lax regulations to attract foreign capital. Tighter home-country regulations reduce the transparency of banks’ foreign subsidiaries. Our result highlights the importance of monitoring the disclosure practices among banks’ foreign subsidiaries.

Keywords: China; Financial Development; Firms (search for similar items in EconPapers)
Date: 2020-02, Revised 2020-02
New Economics Papers: this item is included in nep-ban
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Persistent link: https://EconPapers.repec.org/RePEc:hku:briefs:202037

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