11  Evidence on the risk-return trade-off for banks is inconclusive. Recent evidence for US states suggests that intensified competition can promote risk taking and have negative implications for financial stability (Jiang, Levine, Lin 2018).
In addition, such policies can build resilience in the financial system, enhancing its ability to absorb and shrug off unexpected losses from any source, including sharp asset price declines. Of course, monetary policy also has the power to lean against the growth of asset bubbles.