When regulation is tightened in one area, incentives are put in place for other intermediaries to step in. When certain business activities are pushed out of the banking sector, it does not necessarily mean that the risks for financial stability increase, but nor does it mean that these activities will not pose risks if they are handled by other market participants.
Axel A Weber: Making the financial system more resilient – the role of capital requirements Speech by Professor Axel A Weber, President of the Deutsche Bundesbank, at Financial Services Ireland (FSI), Dublin, 10 March 2010. * 1.