systemic risk. Equity capital acts as a buffer against losses, and reduces incentives for excessive risk taking. Basel capital … lower capital requirements resulting in excessive risk taking. Furthermore, the bank and the CDS seller (insurer) prefer … high correlation in their returns and jointly shift the risk to the regulator. CDS can be traded at a price higher than its …

products could be sold at reasonable prices. Early on, the goals of futures regulation centered one particular risk facing … argues, that is the problem. The many retail investors that now participate (indirectly) in the futures markets are at risk …