On the asset side, fundamental guiding principles, as far as banks’ investment activities is concerned, have been: (i)  Nature of different credit exposures is different and all exposures cannot be treated on par.
The regulatory prescriptions have not recognised the concept of “risk as a fungible commodity” and the fundamental distinction between banks taking credit exposure through giving loans and investing in bonds has not been lost. There are stipulations capping banks’ investments in corporate bonds, particularly unrated bonds which are nothing but proxy-loans.