Policymakers are therefore faced with the difficult challenge of balancing efforts to manage systemic risks against efforts to ensure that market participants bear the costs of imprudent risk taking ...

Citations: Marshall, David, Subu Venkataraman. 1996. Bank Capital for Market Risk: A Study in Incentive-Compatible Regulation. Chicago Fed Letter.

Froot, K. "Incentive Problems in Financial Contracting: Impacts on Corporate Financing, Investment, and Risk Management Policies." Chap. 7 in The Global Financial ...