Deregulation Poses Global Threat of Regulatory Arbitrage

June 1st, 2017

American Banker shared Charles Hastie’s insights on the recent pivot away from globally harmonized financial regulation and the threats this trend poses.

Deregulation Poses Global Threat of Regulatory Arbitrage

By Charles Hastie
May 31, 2017

Last year brought a noticeable pivot away from globally harmonized financial regulation. Political campaigns hostile to globalization and regulation proved victorious in the U.S. presidential election and the U.K.’s Brexit referendum.

The far-reaching effects of this pivot have not been fully considered. These mandates to prioritize national interests over international cooperation could cause a chain reaction of sorts. They risk igniting a vicious cycle of competitive deregulation and regulatory arbitrage in the financial services sector across multiple jurisdictions. Repeals of regulation in one country could attract banks from another, prompting other nations subsequently to enact their own competitive rollbacks, either to benefit from or not to lose institutions as a result of the corporate migration.

READ THE FULL ARTICLE HERE.