That’s the “good” risk-taking. However, banks may be tempted to finance risky but negative net present value loans – that is excessive or “bad” risk-taking.
One of the first things they may do is increase their internal assessments of capital needs for these activities, given the added risks that stress tests reveal. They may wish to restructure contracts or alter terms. Institutions also might ask for higher initial margin, given that subsequent calls may not provide as much risk mitigation during distress.