When does increasing financial regulation lead to a more competitive international financial centre?

According to the Menon Rule (or the Menon Hypothesis), expanding financial services regulation helps a financial centre’s competitiveness when compliance staff hiring is less than the value that they produce, the extent to which regulators don’t ratchet up rules as they see banks becoming better able to comply and when profits grow. We name the rule after a Singaporean Central bank official who speculated about such a relationship in a public speech some years ago….