We find that heightened cross-border bank flows are associated with lower systemic risk in a target country’s banking system. The reductions in systemic risk are stronger for flows coming from source countries with stronger regulatory oversight than the target country. Such cross-border bank flows linked to regulatory arbitrage are also associated with improvements in target banking sector profitability, asset quality, and efficiency. We assess several alternative channels of influence for cross-border bank flows but interpret the evidence on these flows as mostly consistent with a benign form of regulatory arbitrage.

中文翻译：

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跨境银行流动和系统性风险

我们发现，跨境银行流动的增加与目标国家银行系统的系统性风险降低有关。对于来自监管监督强于目标国家的来源国的资金流，系统性风险的降低更为明显。这种与监管套利相关的跨境银行流动也与目标银行业盈利能力、资产质量和效率的改善有关。我们评估了影响跨境银行流动的几种替代渠道，但将这些流动的证据解释为与监管套利的良性形式基本一致。