Commentary: Basel rules make financial system more vulnerable

12/4/2011 | Wall Street Journal, The

Peter Wallison, a senior fellow at the American Enterprise Institute, explains capital requirements for financial institutions under Basel rules. He argues that the rules would make the broader system more vulnerable to a common shock. "This does not mean that all regulation is counterproductive," he writes. "Yet the way it is currently pursued under the Basel rules will -- through encouraging future common shocks -- make the financial system more, rather than less, vulnerable to systemic breakdowns."

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Wall Street Journal, The

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