Simpler bank rules risk creating loopholes, study says
• A study by researchers, including Professor Mariassunta Giannetti of the Stockholm School of Economics, warns that simplifying bank regulations in the U.S. and Britain could inadvertently weaken financial stability. • The research suggests that while complex rules are harder to manage, they are more difficult to circumvent, whereas simpler rules are more likely to be "gamed" by lenders. • This finding is significant because it indicates that banks may shift risks elsewhere in the system to bypass simplified regulations, even if those rules appear strict on paper.
finance.yahoo.com
