Which of the following describes regulatory arbitrage?
A) Finding a way of reducing capital requirements without changing the risks being taken
B) Buying products that are not subject to regulation
C) Shorting products that are not subject to regulation
D) Trading with the government

Question

Quizplus · Accepted Answer

Regulatory arbitrage involves organizing trading and accounting so that regulatory capital is reduced without the risks being taken changing.

Which of the Following Describes Regulatory Arbitrage