Multinational banks: Supranational resolution regimes and the importance of capital regulation

Ulf Maier

Discussion Papers in Economics from University of Munich, Department of Economics

Abstract: The lack of coordination in the resolution of multinational banks has led to demands for the increased centralization of resolution regimes. However, as this paper argues, the anticipation of resolution procedures affects the incentives of host countries to impose capital standards on their resident banks. Critically, it is shown that overall welfare can even be decreased by introducing a centralized resolution regime without fully centralizing capital requirements. As, in the aftermath of the financial crisis, only countries that are not part of a supranational resolution regime unilaterally and significantly increased the capital requirements for their largest resident banks, this paper can help to understand and study the heterogeneity of the observed regulatory approaches.

Keywords: regulatory competition; multinational banks; capital requirements; bank supervision (search for similar items in EconPapers)
JEL-codes: F36 G18 G21 G33 H73 (search for similar items in EconPapers)
Date: 2016-07
New Economics Papers: this item is included in nep-cba
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Persistent link: https://EconPapers.repec.org/RePEc:lmu:muenec:29630

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