#Banks #reallocating #risk #reducing #Fed #study
Basel III has led to banks’ parent companies transferring risk to their non-bank subsidiaries, research from the Federal Reserve Bank of New York has found.
In a post on July 17, Nicola Cetorelli and Shohini Kundu say banks’ activities have become less risky as a result of Basel III because the regulatory framework has forced them to hold more equity and engage in less risky activities, such as leveraged lending. “Judged at the level of the bank alone, Basel III did exactly what it was designed
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Financial Stability – centralbanking.com
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