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Cross-border cooperation between securities regulators

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  • Silvers, Roger

Abstract

The events of September 11, 2001, prompted sweeping cross-border coordination efforts for securities regulators around the globe. After 9/11, the International Organization of Securities Commissions (IOSCO) forged a nonbinding arrangement—the Multilateral Memorandum of Understanding Concerning Consultation and Cooperation and the Exchange of Information (MMoU)—that standardized the protocol for information sharing among participating securities regulators. Because regulators from different countries entered the MMoU at different times, their enlistments created a set of staggered shocks. I use these shocks to show that the resulting cross-border cooperation (a) increases cross-border enforcement and (b) reduces the cost of liquidity provision in the capital markets of participating countries. These results support the conclusion that the MMoU helps fill gaps in cross-border regulation that historically exposed investors to information asymmetry, agency costs, and expropriation risks.

Suggested Citation

  • Silvers, Roger, 2020. "Cross-border cooperation between securities regulators," Journal of Accounting and Economics, Elsevier, vol. 69(2).
    • Handle: RePEc:eee:jaecon:v:69:y:2020:i:2:s0165410120300033
    DOI: 10.1016/j.jacceco.2020.101301
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    Cited by:

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    2. Tsang, Albert & Xiang, Yi & Yu, Li, 2023. "Cross-border regulatory cooperation and analyst forecasts," International Review of Financial Analysis, Elsevier, vol. 90(C).
    3. Koulikidou, Kleopatra & Chantziaras, Antonios & Dedoulis, Emmanouil & Leventis, Stergios, 2023. "Regulatory enforcement, foreignness, and language negativity: Evidence from SEC comment letters," Journal of International Accounting, Auditing and Taxation, Elsevier, vol. 51(C).
    4. Mengchen Ji & Fujia Li & Shuangjie Xu & Yan Zhuang & Tsydypov Bair & Alexey Bilgaev & Kexin Guo, 2023. "Potential for Economic Transition and Key Directions of Cross-Border Cooperation between Primorsky Krai (Russia) and Jilin (China)," Sustainability, MDPI, vol. 15(5), pages 1-25, February.
    5. Maryna Tverdostup & Tiiu Paas & Mariia Chebotareva, 2022. "What Can Support Cross-Border Cooperation in the Blue Economy? Lessons from Blue Sector Performance Analysis in Estonia and Finland," Sustainability, MDPI, vol. 14(3), pages 1-17, February.
    6. Silvers, Roger, 2021. "Does regulatory cooperation help integrate equity markets?," Journal of Financial Economics, Elsevier, vol. 142(3), pages 1275-1300.

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    More about this item

    Keywords

    Cross border; Information sharing; Networks; Regulatory cooperation; Enforcement;
    All these keywords.

    JEL classification:

    • K22 - Law and Economics - - Regulation and Business Law - - - Business and Securities Law
    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation
    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • F59 - International Economics - - International Relations, National Security, and International Political Economy - - - Other
    • M48 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Government Policy and Regulation

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