Regulatory arbitrage Regulatory arbitrage is a process in which banks keep on their books assets that have the same risk-based capital requirement but are relatively risky, such as a loan to a company with a very low credit
Regulatory forbearance Regulatory forbearance is the regulators’ refraining from exercising their right to put an insolvent bank out of business.
Regulatory capture Regulatory capture is an industry’s domination of a regulatory agency through lobbying and staffing the agency with people drawn from the industries being regulated.
Definition