The political economy of the G20 agenda on financial regulation
The paper empirically examines the implementation record of international financial
regulation of the banking sector. The study finds that the size of the banking sector
and the presence of global systemically important banks (G-SIBs) are positively associated
with a stronger implementation record. These results suggest that cooperative motives
of internalising externalities, creating a level playing field and preserving financial
stability play a role in explaining the implementation record. We find evidence that
this cooperative behaviour may be driven by the self-interest of global players as
the positive record is particularly strong in countries where large banking sectors
and big banks are both present, and where regulation only applies to large players.
Sectoral concentration, bank health and the share of foreign ownership yield more
mixed results as regards their impact on implementation.
Published on August 13, 2020
In series:OECD Working Papers on Finance, Insurance and Private Pensionsview more titles