@article{Danielsson2002b,
	author={J{\'o}n Dan{\'i}elsson},
	year=2003,
	month=jun,
	journal={CESifo Economic Studies},
	volume=49,
	issue=2,
	page={157--179},
	title={On the feasibility of risk based regulation},
	abstract={Risk based regulation has emerged as the primary ingredient in the Basel-II proposals, where a bank capital is to become a direct function of a bank's riskiness. While the notion that bank capital be risk sensitive is intuitively appealing, the actual implementation, in the form of Basel-II, carries with it a host of potentially perverse side effects. Basel-II may increase financial risk, both for individual institutions and the entire banking system, and hence promote financial instability. This can happen, e.g., due to the endogenous nature of risk.},
}