The problem of regulatory arbitrage: A transaction cost economics perspective

• 成果类型: Article
• 署名作者: Marjosola, Heikki
• 署名单位: University of Helsinki
• 刊物名称: REGULATION & GOVERNANCE
• ISSN/ISSBN: 1748-5983
• DOI: 10.1111/rego.12287
• 发表日期: 2021
• 页码: 388-407
• 关键词: Financial innovation; securities-regulation; COMPETITION; principles; banking; institutions; FOUNDATIONS; governance; STABILITY; CONTRACT

摘要

Regulatory arbitrage, or the ability of financial firms to circumvent or neutralize rules, is a classic problem of financial regulation. This article draws on transaction cost economics (TCE) to reformulate this old problem, thus defining regulatory arbitrage as a contracting hazard arising from interactions between the regulator and regulated firms, given bounded rationality and opportunism. Following standard TCE, the article first characterizes the implicit regulatory contract in finance, focusing in particular on the mobile and elastic nature of regulated actors and financial assets as well as the contested utility of financial innovation. It is then argued that this incomplete and hazard-prone regulatory bargain must be matched with a governance structure that both adapts to unforeseen circumstances and avoidance strategies and copes with radical uncertainty about the welfare consequences of financial innovation. To that end, the article discusses how a governance structure here termed relational regulation might facilitate such ex post governance under uncertainty.