On The Role of Regulatory Banking Capital. Harald Benink Jón Daníelsson Ásgeir Jónsson April 6, 2006. Traditional Function of Capital. Buffer, incentives, protection of depositors Explicit and implicit creditor insurance not correctly priced
On The Role of Regulatory Banking Capital
April 6, 2006
on the idea of the government prescribing regulations for bridge design
“In other words, embarrass and shackle the progress of improvements of tomorrow by recording and registering as law the prejudices and errors of today”.
What is the probability of a thousand people walking at random ending up walking exactly in step?
… then the probability is close to zero
This is endogenous risk