International Regulation: How Much Cooperation is Needed?
As financial markets have become increasingly international, the question of how competing institutions from different countries should be regulated has been raised repeatedly in many different contexts. I will attempt to address that question by analyzing three recent attempts at coordinating international regulation: (1) the risk-based capital standards developed by the regulators of the major industrial countries, (2) the financial integration initiatives of the European Community, and (3) the financial provisions of the U.S.-Canada free-trade agreement. I will then suggest a framework for cooperation that is, in my opinion, superior to the frameworks used in reaching those agreements.
KeywordsMonetary Policy Central Bank Capital Requirement Real Estate Investment Trust Bank Regulation
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