UNINTENDED CONSEQUENCES OF THE GLOBAL DERIVATIVES MARKET REFORM

Steven Ongena, Gandré, Pauline, Mike Mariathasan and Ouarda Merrouche
Authors registered in the RePEc Author Service: Pauline Gandré

No 14802, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: We investigate regulatory arbitrage during the G20’s global derivatives market reform. We hand-collect comprehensive data on the staggered reform process and show that its progress is primarily driven by structural time-invariant factors. Following the reform banks shift up to 70 percent of their derivatives activity towards less regulated jurisdictions. This shift is driven by reform items – such as the promotion of central clearing – that are costly, but do not directly benefit them. Subsidiaries in jurisdictions with more regulatory progress shift into riskier portfolios.

Keywords: Bank regulation; Regulatory arbitrage; Otc markets; Derivatives; Cross-border financial institutions; Financial risk (search for similar items in EconPapers)
JEL-codes: G15 G18 G21 G23 G28 (search for similar items in EconPapers)
Date: 2020-05
New Economics Papers: this item is included in nep-ban
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Citations: View citations in EconPapers (1)

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Related works:
Journal Article: Unintended Consequences of the Global Derivatives Market Reform (2024)
Working Paper: Unintended Consequences of the Global Derivatives Market Reform (2024)
Working Paper: Unintended Consequences of the Global Derivatives Market Reform (2021)
Working Paper: Unintended Consequences of the Global Derivatives Market Reform (2021)
Working Paper: Unintended Consequences of the Global Derivatives Market Reform (2020)
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