Jurisdiction shopping for Dummies

[professor rat]

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....

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