TY  - JOUR
AU  - Carbo-Valverde,Santiago
AU  - Kane,Edward J.
AU  - Rodriguez-Fernandez,Francisco
TI  - Evidence of Regulatory Arbitrage in Cross-Border Mergers of Banks in the EU
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 15447
PY  - 2009
Y2  - October 2009
UR  - http://www.nber.org/papers/w15447
L1  - http://www.nber.org/papers/w15447.pdf
N1  - Author contact info:
Santiago Carbo-Valverde
Departamento de Teoría e Historia Económica
Facultad de CCEE y Empresariales
Universidad de Granada
s/n E-18071, Granada, Spain
E-Mail: scarbo@ugr.es

Edward J. Kane
2325 E Calle Los Altos
Tucson, AZ 85718
Tel: 520-299-5066
E-Mail: edward.kane@bc.edu

Francisco Rodriguez-Fernandez
Departamento de Teoría e Historia Económica
Facultad de CCEE y Empresariales
Universidad de Granada
s/n E-18071, Granada, Spain
E-Mail: franrod@ugr.es
AB  - Banks are in the business of taking calculated risks. Expanding the geographic footprint of an organization’s profit-making activities changes the geographic pattern of its exposure to loss in ways that are hard for regulators and supervisors to observe. This paper tests and confirms the hypothesis that differences in the character of safety-net benefits that are available to banks in individual EU countries help to explain the nature of cross-border merger activity. If they wish to protect taxpayers from potentially destabilizing regulatory arbitrage, central bankers need to develop statistical procedures for assessing supervisory strength and weakness in partner countries. We believe that the methods and models used here can help in this task.
ER  -