Here a quotation from a book I've been reading: "The eurocurrency markets represent a type of regulatory arbitrage. Eurobanking is a managed financial package that combines the currency of one country (one regulatory environment) with the banking regulations and competitive efficiencies of another country. This repackaging was made possible by improvements in worldwide communications links and information technology. If the regulatory burden becomes too high in one area of the world, the bundle of eurobanking services can be reassembled in another. Hence, national regulators must compete to maintain their respective shares of the eurocurrency business. Competition with respect to lending quotas, reserve requirements, capital requirements, deposit insurance, the taxing and reporting of interest payments, and the taxing of profits, dividends, and capital gains, all measured against any perceived positive benefits of local regulation, governs the geographical distribution of eurocurrency market shares." From _International Financial Markets_, by J. Orlin Grabbe, formerly of the Wharton School. Regulatory arbitrage is an Important concept, as well as a great phrase. The writer is square in the middle of the mainstream in the business world, and note how effortlessly he speaks of avoiding governments and playing them off against each other.... https://marc.info/?t=96583955000001&r=1&w=1