Comment on Thomas Helbling: “Regulation and Technology as Determinants of International Trade in Banking Services”

The paper by Helbling deals with the theory of international trade in banking services. Up to this time, not much of a formal theory of international trade in financial services exists. Consequently, this is a very welcome endeavor which deserves our applause. Helbling is especially interested in regulatory differences between countries as a source of comparative advantage and an influence on trade patterns. To some extent, he also considers other determinants of trade, such as the nature of technology or factor endowments. But his main motivation is to ask how changes in regulations (the creation of regulatory differences) affect trade and banking structures in the international economy, given these other elements. Still another group of factors which might affect comparative advantage and trade in the financial sector is left entirely in the background, such as political and monetary stability and reliability, differences in taxation, the geographical distribution of customers and the international nature of their activities (foreign trade, foreign investment), and the possible importance of customer relationships, to name a few.