Multinational banks in regulated markets: Is financial integration desirable?
Bibliographic record
Abstract
Abstract A core question regarding the increasing share of international trade in financial services is whether this causes banks to take more or fewer risks. We study this issue in a setting where two multinational banks engage in duopoly competition for their lending in two regional markets. Each bank affiliate can choose both the lending volume and the level of monitoring, and hence risk‐taking, where the risk of bank failure is partly borne by taxpayers in the bank affiliate's host country. Governments choose minimum capital requirements to optimally solve the trade‐off between higher lending volumes and consumer surplus, and the expected tax losses faced by taxpayers. In this setting, we consider two types of financial integration. A reduction in the transaction costs of cross‐border banking increases risk‐taking by banks, harming taxpayers and potentially overall welfare. In contrast, a reduction in the costs of screening foreign firms reduces banks' risk‐taking and is beneficial for consumers and taxpayers alike.
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How this classification was reachedexpand
Full frame machine prediction
Teacher imitationNot calibrated prevalence, not ground truth. Human validation pending. The Gemma side is a direct model label for every work in the frame, read from the title-only record. The Codex side is a classifier learned from the 10,348 direct Codex labels and calibrated to design-weighted sample rates; fields without enough sample support carry no Codex call. Candidate is the union of the two sides; consensus is their intersection. These outputs are machine_predicted_unvalidated and are not human labels.
Distilled classifier scores by category (both heads)
| Category | Codex | Gemma |
|---|---|---|
| Metaresearch | 0.007 | 0.020 |
| Meta-epidemiology (narrow) | 0.000 | 0.000 |
| Meta-epidemiology (broad) | 0.001 | 0.001 |
| Bibliometrics | 0.001 | 0.001 |
| Science and technology studies | 0.003 | 0.005 |
| Scholarly communication | 0.009 | 0.005 |
| Open science | 0.001 | 0.003 |
| Research integrity | 0.003 | 0.002 |
| Insufficient payload (model declined to judge) | 0.007 | 0.000 |
Machine scores (provisional)
The two teacher heads of the student model, read on this work. A score orders the frame for review; it never asserts a category, and the validation status ships verbatim with every row.
Baseline scores from an immature model (maturity gate not passed, 7 training rounds). Scores rank; they never assert a category.
score_only:v0-immature-baseline · verbatim from the scoring run: score_only means the number may rank works, and no category label ships from itClassification
machine, unvalidatedMachine predicted; a candidate call from one source (direct Gemma or distilled Codex), not a consensus.
How this classification was reached, model by model and score by score, is at the end of the page under "How this classification was reached".