Question #14
Reading: Reading 11 Analysis of Financial Institutions
PDF File: Reading 11 Analysis of Financial Institutions.pdf
Page: 5
Status: Correct
Correct Answer: B
Question
Which of the following is least likely a reason for the establishment of global and regional regulatory bodies?
Answer Choices:
A. To increase harmonization or regulatory rules
B. To increase global opportunities for regulatory arbitrage
C. To minimize systemic risk
Explanation
One aim of establishing global regulatory bodies is to reduce, not increase, opportunities
for regulatory arbitrage (multinational companies exploiting differences in regional
regulations to avoid unfavorable rules).