Self-Regulation and Stock Listing Decision of Banks

Sarah El Joueidi

DEM Discussion Paper Series from Department of Economics at the University of Luxembourg

Abstract: This paper studies the banks' decisions to self-regulate their activities and their selection of the financial markets where they raise their capital. We show that in an economy with a single financial market, self-regulation increases investors' demand for banks' stocks while weaker bank concentration reduces incentives to self-regulate. In addition, in an economy with separate financial markets, banks preferably raise capital in financial markets hosting larger number of investors. However, when self-regulation costs vary across financial places, banks may list their stocks in the country with the smaller number of investors.

Keywords: Endogenous quality; self-regulation; economic geography; banks; financial markets; macroprudential effort. (search for similar items in EconPapers)
Date: 2017
New Economics Papers: this item is included in nep-ban
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Persistent link: https://EconPapers.repec.org/RePEc:luc:wpaper:17-05

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