Banks are being herded into using similar risk methods by regulation, experts warn

Steve Baker MP
Steve Baker, member, Treasury Select Committee

Regulation may be exacerbating contagion risks by encouraging banks to employ similar risk management techniques, witnesses told the UK's Treasury Select Committee today.

In a rare moment of approximate agreement, Kevin Dowd, a professor of economics at Durham University, and Thomas Huertas, a partner at Ernst and Young, warned of the unintended consequences of using risk-weighted assets to set capital requirements.

"Better managed banks will tend to preserve an independent and separate risk fun

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