Unintended Consequences of the Global Derivatives Market Reform

• 成果类型: Article
• 署名作者: Gandre, Pauline; Mariathasan, Mike; Merrouche, Ouarda; Ongena, Steven
• 署名单位: KU Leuven; University of Zurich; Swiss Finance Institute (SFI); Norwegian University of Science & Technology (NTNU)
• 刊物名称: JOURNAL OF THE EUROPEAN ECONOMIC ASSOCIATION
• ISSN/ISSBN: 1542-4766
• DOI: 10.1093/jeea/jvae010
• 发表日期: 2024
• 页码: 2467-2506
• 关键词: regulatory arbitrage; RISK

摘要

Following the early implementation of the global over-the-counter (OTC) derivatives market reform in the USA and the associated increase in trading costs, US banks shifted up to 60% of their OTC derivatives activity abroad, particularly toward less regulated jurisdictions. Consistent with a cost saving incentive of regulatory arbitrage, we find that this flight abroad is driven by costlier blocks of the reform and subsequently causes a narrowing of swap spreads. We further show that this regulatory arbitrage causes an increase in financial risk as more activity is shifted to more lenient jurisdictions.