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Abstract
We study the interaction between the capital regulation and supervision of multinational banks when the latter is centralized. Both, stricter regulation and stricter supervision have positive international externalities in that they reduce the intrabank cost of cross-subsidizing failing subsidiaries abroad. We show that stricter, centralized supervision leads to more lenient capital regulation at the national level. We identify the cases in which the too lenient regulation overcompensates the global welfare gain of stricter supervision. In these cases, moving towards a supervisory union reduces global welfare.
| Dokumententyp: | Paper |
|---|---|
| Keywords: | banking supervision; capital regulation; multinational banks |
| Fakultät: | Volkswirtschaft > Munich Discussion Papers in Economics > Geld |
| Themengebiete: | 300 Sozialwissenschaften > 330 Wirtschaft |
| URN: | urn:nbn:de:bvb:19-epub-77020-2 |
| Sprache: | Englisch |
| Dokumenten ID: | 77020 |
| Datum der Veröffentlichung auf Open Access LMU: | 03. Aug. 2021, 10:33 |
| Letzte Änderungen: | 04. Aug. 2021, 05:31 |
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