While the transparency effects is difficult to isolate from other effects which are at work, there is, however, some empirical evidence for the insurance effect. 7 Apart from this, empirical research on the risk-taking channel is in its early stage and is consequently rather thin on the ground.
Therefore, we do not yet have firm empirical evidence for the existence and the relative importance of the risk-taking channel. However, recent ECB research shows for the euro area that low interest rates soften bank lending  5  See Borio, Zhu (2008), “Capital regulation, risk-taking and monetary policy: a missing link in the transmission mechanism?”, BIS, Working Papers No 268.