Impact of activity restrictions on risk taking of banks: does competition matter during crisis?

What is it about?

We explore the interplay between activity restrictions and competition to evaluate bank risk-taking behaviour under varying economic conditions. In particular, we investigate the role of activity restrictions on bank risk-taking through the channel of competition during financial crisis and non-crisis periods. We aim to help regulators consider activity restrictions in shaping bank risk-taking behaviour based on the level of competition.

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