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Recommended Readings: Finance

 

Regulating risk: A Measured Response To The Banking Crisis
by David Halliday McIlroy | Journal of Banking Regulation Vol. 9, 4 284292

 Bank regulation must minimise the adverse consequences of banks taking excessive risks. The author  proposes three reforms: requiring banks to retain a proportion of any loan that they originate, so as to reduce the risks of moral hazard; insisting that the risks involved in the financial products in which banks trade are transparent; and reforming Basel II so that the amounts of regulatory capital that banks are required to hold are less procyclical than is currently the case.