Quick Insurance Source

Viral Acharya and Matthew Richardson write, for years, regulation - capital requirement in particular - has targeted individual bank risk, when the justification for its existence resides primarily in managing systemic risk. It is to be expected that financial institutions would maximise returns from the explicit and implicit guarantees by taking excessive aggregate risks, unless these are priced properly by regulators. Pointer from Tyler Cowen. The diagnosis of regulatory arbitrage is

Filed under: Insurance News