Danielsson, Jon; Jorgensen, Bjorn N.; Vries, Caspar G. de - 2000
, demonstrate that current regulatory systems may
actually induce risk taking, while at the same time impose significant
costs on the … financial industry. In general, the impact of regulatory risk
constraints is unpredictable and the scope for unintended results …,giventhecurrentregulatoryregime,banksinternalmodelsare
3
used to calculate regulatory risk capital, regulations may increase instability.
Perhaps this result explains the …