Just think about how public incentives for home ownership helped housing bubbles in various countries to emerge or how the zero-risk weighting of sovereign bonds gave incentives to over-invest in sovereigns. Hence, regulators should refrain from substituting and fine-tuning markets and private agents.
We should bear in mind what Walter Eucken, one of the founding fathers of German ordoliberalism, once wrote, namely that economic policy should aim at “the shaping of the forms of order of an economy” and “not the direction of economic process”. BIS central bankers’ speeches  3  Regulation is not an end in itself.