The Network Effects of International Financial Regulation

32 Pages Posted: 27 Dec 2018 Last revised: 3 Jan 2019

See all articles by Hadar Yoana Jabotinsky

Hadar Yoana Jabotinsky

Tel Aviv University - Cegla Center for Interdisciplinary Research of the Law

Barak Yarkoni

Tel Aviv University - Buchmann Faculty of Law; UC Berkeley School of Law; Harvard Law School

Date Written: November 20, 2018

Abstract

This paper examines the question of global coordination among financial regulators through the lens of network effects. It introduces and surveys three unique kinds of network effects which can be created by the adoption of a global financial regulatory standard: (a) network effects in the financial markets; (b) network effects among the regulated firms; and (c) network effects among the financial regulators themselves. This paper offers a model which shows that positive network effects can generate a spiral ratchet effect that will induce countries to sequentially adopt global financial regulatory standards.

Keywords: network effects, financial regulation

JEL Classification: K33, C45

Suggested Citation

Jabotinsky, Hadar Yoana and Yarkoni, Barak, The Network Effects of International Financial Regulation (November 20, 2018). Hebrew University of Jerusalem Legal Research Paper No. 19-04. Available at SSRN: https://ssrn.com/abstract=3298597 or http://dx.doi.org/10.2139/ssrn.3298597

Hadar Yoana Jabotinsky (Contact Author)

Tel Aviv University - Cegla Center for Interdisciplinary Research of the Law ( email )

Ramat Aviv
Tel Aviv, IL
Israel

Barak Yarkoni

Tel Aviv University - Buchmann Faculty of Law ( email )

Ramat Aviv
Tel Aviv 69978, IL
Israel

UC Berkeley School of Law ( email )

215 Boalt Hall
Berkeley, CA 94720-7200
United States

Harvard Law School

Cambridge, MA 02138
United States

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