IDEAS home Printed from https://ideas.repec.org/a/prg/jnlcfu/v2017y2017i3id498p5-17.html
   My bibliography  Save this article

Problems with quality in financial distribution - a state or market failure?
[Problémy v distribuci finančních produktů: selhání trhu anebo regulace?]

Author

Listed:
  • Jiří Šindelář
  • Michal Erben

Abstract

The paper deals with negative impacts of chosen regulatory attributes (regulatory arbitrage, relative over and under regulation) on economic agents' behaviour in the financial distribution area. Using three case studies from the Czech market (life insurance, corporate bonds and pension savings), we demonstrate situations, when state regulatory incursions caused substantial deformations of the target market and the subsequent detriment of final customers. Although partial market failures cannot be ruled out, our observations show that in particular, the regulatory arbitrage between individual sub-sectors of the financial market is a potent stimulator of distribution momentum, which, in turn, can lead to future systemic risks.

Suggested Citation

  • Jiří Šindelář & Michal Erben, 2017. "Problems with quality in financial distribution - a state or market failure? [Problémy v distribuci finančních produktů: selhání trhu anebo regulace?]," Český finanční a účetní časopis, Prague University of Economics and Business, vol. 2017(3), pages 5-17.
    • Handle: RePEc:prg:jnlcfu:v:2017:y:2017:i:3:id:498:p:5-17
    DOI: 10.18267/j.cfuc.498
    as

    Download full text from publisher

    File URL: http://cfuc.vse.cz/doi/10.18267/j.cfuc.498.html
    Download Restriction: free of charge
    File URL: http://cfuc.vse.cz/doi/10.18267/j.cfuc.498.pdf
    Download Restriction: free of charge
    File URL: https://libkey.io/10.18267/j.cfuc.498?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Simon H. Kwan & Willard T. Carleton, 2010. "Financial Contracting and the Choice between Private Placement and Publicly Offered Bonds," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 42(5), pages 907-929, August.
    2. Joel F. Houston & Chen Lin & Yue Ma, 2012. "Regulatory Arbitrage and International Bank Flows," Journal of Finance, American Finance Association, vol. 67(5), pages 1845-1895, October.
    3. Alan S. Blinder, 2015. "Financial Entropy and the Optimality of Over-regulation," World Scientific Book Chapters, in: Douglas D Evanoff & Andrew G Haldane & George G Kaufman (ed.), The New International Financial System Analyzing the Cumulative Impact of Regulatory Reform, chapter 1, pages 3-35, World Scientific Publishing Co. Pte. Ltd..
    4. Diacon, Stephen & Hasseldine, John, 2007. "Framing effects and risk perception: The effect of prior performance presentation format on investment fund choice," Journal of Economic Psychology, Elsevier, vol. 28(1), pages 31-52, January.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Alpanda, Sami & Aysun, Uluc, 2022. "Regulatory arbitrage and economic stability," Journal of International Money and Finance, Elsevier, vol. 129(C).
    2. Uluc Aysun & Michael Tseng, 2021. "Regulatory arbitrage and global push factors," Working Papers 2021-01, University of Central Florida, Department of Economics.
    3. Avdjiev, Stefan & Aysun, Uluc & Tseng, Michael C., 2022. "Regulatory arbitrage behavior of internationally active banks and global financial market conditions," Economic Modelling, Elsevier, vol. 112(C).
    4. Nguyen, Dung Thuy Thi & Diaz-Rainey, Ivan & Roberts, Helen & Le, Minh, 2021. "Loans from my neighbours: East Asian commercial banks, financial integration, and bank default risk," International Review of Financial Analysis, Elsevier, vol. 74(C).
    5. Darracq Pariès, Matthieu & Kok, Christoffer & Rancoita, Elena, 2019. "Macroprudential policy in a monetary union with cross-border banking," Working Paper Series 2260, European Central Bank.
    6. Kleimeier - Ros, Stefanie & Qi, Shusen & Sander, H., 2016. "Deposit Insurance in Times of Crises: Safe Haven or Regulatory Arbitrage? (RM/15/026-revised-)," Research Memorandum 026, Maastricht University, Graduate School of Business and Economics (GSBE).
    7. Norring, Anni, 2022. "Taming the tides of capital: Review of capital controls and macroprudential policy in emerging economies," BoF Economics Review 1/2022, Bank of Finland.
    8. Daniela Laas & Caroline Franziska Siegel, 2017. "Basel III Versus Solvency II: An Analysis of Regulatory Consistency Under the New Capital Standards," Journal of Risk & Insurance, The American Risk and Insurance Association, vol. 84(4), pages 1231-1267, December.
    9. Előd Takáts & Judit Temesvary, 2017. "Can macroprudential measures make cross-border lending more resilient?," BIS Working Papers 683, Bank for International Settlements.
    10. Frame, W. Scott & Mihov, Atanas & Sanz, Leandro, 2020. "Foreign Investment, Regulatory Arbitrage, and the Risk of U.S. Banking Organizations," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 55(3), pages 955-988, May.
    11. Benjamin M. Blau & Todd G. Griffith & Ryan J. Whitby, 2020. "Opacity and the comovement in the stock prices of banks," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 60(4), pages 3557-3580, December.
    12. Taejun (David) Lee & Wonjun Chung & Eric Haley, 2011. "Adherence of Retirement Mutual Fund Providers to the Securities and Exchange Commission (SEC)’s Advertising Guidance: Provision and Readability of Advertising Disclosure," Journal of Consumer Policy, Springer, vol. 34(4), pages 455-474, December.
    13. Kristin J. Forbes, 2021. "The International Aspects of Macroprudential Policy," Annual Review of Economics, Annual Reviews, vol. 13(1), pages 203-228, August.
    14. Smolyansky, Michael, 2019. "Policy externalities and banking integration," Journal of Financial Economics, Elsevier, vol. 132(3), pages 118-139.
    15. Huber, Christoph & Huber, Jürgen & Kirchler, Michael, 2022. "Volatility shocks and investment behavior," Journal of Economic Behavior & Organization, Elsevier, vol. 194(C), pages 56-70.
    16. Sylvain Champonnois, 2006. "Comparing Financial Systems: A structural Analysis," 2006 Meeting Papers 520, Society for Economic Dynamics.
    17. Laeven, Luc & Popov, Alexander, 2023. "Carbon taxes and the geography of fossil lending," Journal of International Economics, Elsevier, vol. 144(C).
    18. Tien Nguyen & Dung Phuong Hoang & Thang Ngoc Doan, 2022. "On the uncertainty-global bank linkage nexus: The moderation of crises, financial regulations, and institutional quality," Journal of Economics and Finance, Springer;Academy of Economics and Finance, vol. 46(4), pages 623-645, October.
    19. Martynova, Natalya & Vogel, Ursula, 2022. "Banks’ complexity-risk nexus and the role of regulation," Journal of Banking & Finance, Elsevier, vol. 134(C).
    20. Cerutti, Eugenio & Osorio-Buitron, Carolina, 2020. "US vs. euro area: Who drives cross-border bank lending to EMs?," Journal of the Japanese and International Economies, Elsevier, vol. 57(C).

    More about this item

    Keywords

    Financial market regulation; Life insurance; Corporate bonds; Pension savings; Systemic risk; Regulace finančního trhu; Životní pojištění; Korporátní dluhopisy; Penzijní spoření; Systémové riziko;
    All these keywords.

    JEL classification:

    • D04 - Microeconomics - - General - - - Microeconomic Policy: Formulation; Implementation; Evaluation
    • D47 - Microeconomics - - Market Structure, Pricing, and Design - - - Market Design
    • G2 - Financial Economics - - Financial Institutions and Services
    • K22 - Law and Economics - - Regulation and Business Law - - - Business and Securities Law

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:prg:jnlcfu:v:2017:y:2017:i:3:id:498:p:5-17. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Stanislav Vojir (email available below). General contact details of provider: https://edirc.repec.org/data/uevsecz.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.