Regulatory Capital and Asset Risk Transfer
“… most modified coinsurance is purchased from reinsurers located in countries with lower regulatory capital requirements and within the same insurance holding group. Our findings expose how insurers use reinsurance to obfuscate their asset risk.” Lire
Capital Requirements and Growth in an Open Economy
“… capital requirements can promote growth by mitigating the risk of financial crises, possibly by encouraging… prudent lending. However, financial development and financial openness tend to mitigate the growth benefits of these policies, because of increased scope for (domestic and cross-border) regulatory arbitrage and, in the case of financial openness, greater opportunities to borrow abroad.” Lire