Confronting Divergent Interests in Cross-Country Regulatory Arrangements
25 Pages Posted: 6 Apr 2006 Last revised: 4 Dec 2022
Date Written: December 2005
Abstract
Although nation-based systems of financial regulation constitute a second-best approach to global welfare maximization, treacherous accountability problems must be acknowledged and resolved before regulatory cooperation can deal fairly and efficiently with cross-border issues. To track and control insolvency risk within and across any set of countries, officials must construct a partnership that allows regulators in every participating country to monitor and to influence counterpart regulators in partnering nations. Using efforts to harmonize the Australian and New Zealand regulatory systems as an example, this paper identifies characteristics by which regulatory systems differ and underscores particular features that make regulatory harmonization difficult to achieve.
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