This paper evaluates the incentives that banks have to herd. It includes a complete literature review of papers from … policy that reduces the costs of over-investment increases the incentives of banks to herd …

measurement of a bank's performance. Despite this, for reasons relating to regulation, the nature of the business and the … theory to banking. We consider the concepts of “capital employed” and “economic capital” in the context of banking and …

. Contrary to claims in the literature that "equity is expensive" and that regulation requiring more equity in the funding mix … entails costs to society, such regulation actually helps create useful commitment for banks to avoid the inefficiently high … borrowing that comes under laissez-faire. Effective regulation is beneficial even without considering systemic risk; if such …

benefits. Contrary to claims in the literature that “equity is expensive” and that regulation requiring more equity in the … funding mix entails costs to society, such regulation actually helps create useful commitment for banks to avoid the … inefficiently high borrowing that comes under laissez-faire. Effective regulation is beneficial even without considering systemic …