We examine why these regulatory differences exist and what they imply for differences in minimum capital requirements for position risk. We consider differences in the definition and measurement of regulatory capital and we quantify differences in the capital charges for position risk by...

We show how a high degree of commonality in investor liquidity shocks can diminish incentives for intermediaries to keep markets open and lead to market collapse, even without information asymmetry or news affecting fundamentals. We motivate our model using the perpetual floating rate note...