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Hal S. Scott, The Competitive Impact of Financial Regulatory Reform, 26 J. Int'l Banking L. & Reg. 527 (2011).


Abstract: Regulatory reforms in the wake of the global financial crisis have made some useful corrections to US and international financial markets. Unfortunately, some of the changes could weaken the competitiveness of US financial institutions. All regulatory proposals should be based on rigorous cost-benefit analysis, and competitive impact should be an important consideration. There are five areas where competitive impact could be particularly important: public support for financial firms; the designation and regulation of systemically important financial institutions; the Volcker Rule; regulations governing derivatives; and capital requirements. As a general matter, without much more international co-ordination, regulatory reforms risk creating significant competitive distortions.