15  Heterogeneity among banks is crucial to this argument: if the N small banks all hold identical portfolios and capital buffers, then tension between MAP and MIP arises here exactly as in the one-bank world. This is another argument for preventing the sort of herd behaviour mentioned in Section 3, incentivising instead the diversification of business models and investment strategies between banks.
16  Bank of England (2011). 4  BIS central bankers’ speeches  overarching MAP objective of reducing systemic risk logically precedes the MIP objective of preventing idiosyncratic bank failures, for three complementary reasons.