n South African Journal of Economic and Management Sciences - The role of cost of capital in regulatory capital discrepancies among developing countries
|Article Title||The role of cost of capital in regulatory capital discrepancies among developing countries|
|© Publisher:||University of Pretoria|
|Journal||South African Journal of Economic and Management Sciences|
|Affiliations||1 North-West University and 2 North-West University|
|Publication Date||Jan 2015|
|Pages||84 - 104|
|Keyword(s)||Banks, Basel, Capital requirements, Cost of capital, Developing economies and Solvency II|
ISI Social Science
Capital as a regulatory instrument has been shown to contribute to competitiveness distortions between developed and developing countries. There is a dearth of literature that analyses the possibility of further competitiveness discrepancies to which capital requirements may contribute among developing countries.
This article explores whether regulatory capital requirements lead to unequal competitive conditions between developing countries based on their costs of capital. It also attempts to identify drivers of such discrepancies. Data of 52 financial institutions from 20 countries spread across 4 geographical regions are used for the analysis.
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