Stressed Banks and Risk-Taking Incentives

AuthorD. Pierret, R. Steri, M. Nemes
Date6 Aug. 2018
CategoryRoundups
Stressed Banks and Risk-Taking Incentives

Responding to the most recent financial crisis, the US Congress approved the Dodd–Frank Wall Street Reform and Consumer Protection Act, which features more stringent regulatory capital requirements and regulatory stress tests. How do capital requirements determined on the basis of regulatory stress tests influence the riskiness of banks’ investments?
 

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