Tag Archives: Macroprudential policies

Regulatory arbitrage in action: evidence from cross-border lending and macroprudential policy

Dennis Reinhardt and Rhiannon Sowerbutts.

We find evidence that certain types of macroprudential regulation are avoided by borrowing from abroad. Borrowing by the non-bank sector from abroad increases after an increase in capital requirement, but not after an increase in lending standards. This is likely to be because of the way that the two regulations are applied and is supportive of strong frameworks for reciprocating capital regulation.

Continue reading

Comments Off on Regulatory arbitrage in action: evidence from cross-border lending and macroprudential policy

Filed under Banking, Financial Stability, International Economics, Macroprudential Regulation, Resolution