Convergence of regulatory standards prescribed by G-20 and those of the US, Europe & other advance countries is required so as to limit regulatory arbitrage and at the same time impose lesser cost on the market participants. Regulatory reform initiatives through a globally agreed mechanism of substituted compliance could address such regulatory arbitrage more effectively than extraterritorial legislation.
The borrower needs answers to a number of questions such as: “What will happen to my mortgage costs if ...?”. This “if” can be related to family matters and external economic events, including interest-rate increases.