%O This version is the author accepted manuscript. For information on re-use, please refer to the publisher’s terms and conditions. %X We study the international coordination of bank capital requirements under a host-country rule: the requirement depends on where the borrower, not the bank, is located. In such a regime, countries compete for scarce bank equity capital. Raising a country’s requirement may generate bank capital outflows as well as inflows. We pin down the condition for the sign of the capital flow and the associated externality, and highlight the policy implications. Absent collaboration, overshooting is likely: individual countries have an incentive to increase Basel III’s Counter-Cyclical Capital Buffer too much in good times and cut it too much in bad times. %L discovery10189190 %J Journal of Financial Economics %K CCyB; International coordination; Race to the bottom; Race to the top; Liquidity services %I Elsevier %D 2024 %V 160 %A Saleem Bahaj %A Frederic Malherbe %T The cross-border effects of bank capital regulation