Regulatory Arbitrage and Cross-Border Syndicated Loans

Regulatory Arbitrage and Cross-Border Syndicated Loans

This paper investigates how international regulatory and institutional differences affect lending in the cross-border syndicated loan market. Lending provided through a foreign subsidiary is subject to subsidiary-country regulation and institutiona...

Full description

Bibliographic Details
Main Authors: Demirguc-Kunt, Asli, Horvath, Balint L., Huizinga, Harry
Format: Working Paper
Language:English
Published: World Bank, Washington, DC 2019
Subjects:
REGULATION
CREDITOR RIGHTS
SYNDICATED LOANS
INTERNATIONAL LENDING
MULTINATIONAL BANK
Online Access:http://documents.worldbank.org/curated/en/856421570624402799/Regulatory-Arbitrage-and-Cross-Border-Syndicated-Loans
http://hdl.handle.net/10986/32521
id okr-10986-32521
recordtype oai_dc
spelling okr-10986-325212022-09-20T00:13:38Z Regulatory Arbitrage and Cross-Border Syndicated Loans Demirguc-Kunt, Asli Horvath, Balint L. Huizinga, Harry REGULATION CREDITOR RIGHTS SYNDICATED LOANS INTERNATIONAL LENDING MULTINATIONAL BANK This paper investigates how international regulatory and institutional differences affect lending in the cross-border syndicated loan market. Lending provided through a foreign subsidiary is subject to subsidiary-country regulation and institutional arrangements. Multinational banks' choices between loan origination through the parent bank or through a foreign subsidiary provide information about these banks' preferences to operate in countries with varying regulations and institutions. The results indicate that international banks have a tendency to switch loan origination toward countries with less stringent bank regulation and supervision consistent with regulatory arbitrage, but that they prefer to originate loans in countries with higher-quality institutions related to financial market monitoring, creditor rights, and the speed of contract enforcement. 2019-10-10T16:38:23Z 2019-10-10T16:38:23Z 2019-10 Working Paper http://documents.worldbank.org/curated/en/856421570624402799/Regulatory-Arbitrage-and-Cross-Border-Syndicated-Loans http://hdl.handle.net/10986/32521 English Policy Research Working Paper;No. 9037 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo World Bank World Bank, Washington, DC Publications & Research Publications & Research :: Policy Research Working Paper
repository_type Digital Repository
institution_category Foreign Institution
institution Digital Repositories
building World Bank Open Knowledge Repository
collection World Bank
language English
topic REGULATION
CREDITOR RIGHTS
SYNDICATED LOANS
INTERNATIONAL LENDING
MULTINATIONAL BANK
spellingShingle REGULATION
CREDITOR RIGHTS
SYNDICATED LOANS
INTERNATIONAL LENDING
MULTINATIONAL BANK
Demirguc-Kunt, Asli
Horvath, Balint L.
Huizinga, Harry
Regulatory Arbitrage and Cross-Border Syndicated Loans
relation Policy Research Working Paper;No. 9037
description This paper investigates how international regulatory and institutional differences affect lending in the cross-border syndicated loan market. Lending provided through a foreign subsidiary is subject to subsidiary-country regulation and institutional arrangements. Multinational banks' choices between loan origination through the parent bank or through a foreign subsidiary provide information about these banks' preferences to operate in countries with varying regulations and institutions. The results indicate that international banks have a tendency to switch loan origination toward countries with less stringent bank regulation and supervision consistent with regulatory arbitrage, but that they prefer to originate loans in countries with higher-quality institutions related to financial market monitoring, creditor rights, and the speed of contract enforcement.
format Working Paper
author Demirguc-Kunt, Asli
Horvath, Balint L.
Huizinga, Harry
author_facet Demirguc-Kunt, Asli
Horvath, Balint L.
Huizinga, Harry
author_sort Demirguc-Kunt, Asli
title Regulatory Arbitrage and Cross-Border Syndicated Loans
title_short Regulatory Arbitrage and Cross-Border Syndicated Loans
title_full Regulatory Arbitrage and Cross-Border Syndicated Loans
title_fullStr Regulatory Arbitrage and Cross-Border Syndicated Loans
title_full_unstemmed Regulatory Arbitrage and Cross-Border Syndicated Loans
title_sort regulatory arbitrage and cross-border syndicated loans
publisher World Bank, Washington, DC
publishDate 2019
url http://documents.worldbank.org/curated/en/856421570624402799/Regulatory-Arbitrage-and-Cross-Border-Syndicated-Loans
http://hdl.handle.net/10986/32521
_version_ 1764476716520046592

Similar Items