Pausch, Thilo; Welzel, Peter - Deutsche Bundesbank - 2012
at a certain (potentially distorted) price. Regulation is found to induce the risk-neutral bank to behave in a more risk … interaction between capital adequacy regulation and credit risk transfer with credit default swaps (CDS) including its effect on … lending behavior and risk sensitivity of a risk-neutral bank. CDS contracts may be used to hedge a bank's credit risk exposure …