Purpose

This paper aims to derive the conditions under which a financial services firm will want to hire a compliance services company and show how much money they should spend.

Design/methodology/approach

This paper uses a mathematical model to show the intuition behind many of the compliance decisions that cost financial services firms billions every year.

Findings

This paper finds that hiring compliance firms may save banks and brokerages money. However, their advice may lead to an embarrass de riches – whereby the lower compliance costs and higher profit advantages they confer may lead to more regulation. Regulators may furthermore tighten regulation – with the expectation that financial service firms will adapt somehow. This paper presents a fresh perspective on the Menon hypothesis, deriving conditions under which financial regulations help the competitiveness of an international financial centre.

Research limitations/implications

The paper represents one of the first and only models of compliance spending by financial services firms.

Practical implications

This paper provides five potential policy responses for dealing with ever ratcheting financial regulations.

Originality/value

The paper hopefully launches literature on the compliance service industry – and the buy-or-do decision to engage in financial services compliance. This paper finds that efficient compliance can hurt firms, by encouraging regulation. This paper shows how firms can forestall the extra regulation that comes with easier internet and computerised monitoring.

中文翻译：

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金融服务竞争，合规与监管理论

目的

本文旨在得出金融服务公司希望雇用合规服务公司的条件，并说明他们应该花多少钱。

设计/方法/方法

本文使用数学模型来显示许多合规决策背后的直觉，这些决策每年使金融服务公司损失数十亿美元。

发现

本文发现，雇用合规公司可以节省银行和经纪人的钱。但是，他们的建议可能会带来尴尬的财富-由此带来的较低的合规成本和较高的利润优势可能会导致更多监管。监管机构可能会进一步加强监管–期望金融服务公司会以某种方式进行调整。本文提出了有关梅农假说的新观点，得出了金融法规有助于提高国际金融中心竞争力的条件。

研究局限/意义

本文代表了金融服务公司合规性支出的首批也是唯一的模型之一。

实际影响

本文提供了五种潜在的政策应对措施，以应对日益棘手的金融法规。

创意/价值

该论文有望发表有关合规服务行业的文献，以及从事金融服务合规的“买断”决定。本文发现，有效的合规可以通过鼓励监管来伤害企业。本文展示了企业如何阻止因更简单的互联网和计算机化监控而带来的额外监管。