In this paper, we investigate how the introduction of complex, model-based capital regulation affected credit risk of … the credit risk of financial institutions. Overall, our results highlight the pitfalls of complex regulation and suggest … financial institutions. Model-based regulation was meant to enhance the stability of the financial sector by making capital …

In this paper, we investigate how the introduction of complex, model-based capital regulation affected credit risk of … the credit risk of financial institutions. Overall, our results highlight the pitfalls of complex regulation and suggest … financial institutions. Model-based regulation was meant to enhance the stability of the financial sector by making capital …

We study the relative strengths and weaknesses of principles based and rules based systems of regulation. In the … into meaningful compliance at the firm level is ambiguous, whereas in the rules based systems there is clarity about the … make less dramatic changes, making principles based regulation less robust than rules based regulation. Firms prefer a …