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