No more call to cancel: the government wants to crack down on ‘subscription traps’

The Conversation, CC BYIt often seems like a great idea at the time. There’s a streaming service, paywalled news site or premium version of an app you want to try, offering a “no strings attached” free trial.

You sign up – with a few easy clicks and your credit card. The trial period passes, and for whatever reason, you decide this product isn’t for you.

Banks’ regulatory risk tolerance

We employ 68 quarters of data – including from non-public supervisory sources – to study how 17 US and 17 euro-area banks balance the risk of breaching regulatory requirements against the cost of maintaining and speedily restoring “management” buffers. We find that steady-state management buffer targets systematically declined and regulatory risk tolerance (RRT) rose following the Great Financial Crisis, especially at banks experiencing a stronger increase in capital requirements.

Banks’ regulatory risk tolerance

We employ 68 quarters of data – including from non-public supervisory sources – to study how 17 US and 17 euro-area banks balance the risk of breaching regulatory requirements against the cost of maintaining and speedily restoring “management” buffers. We find that steady-state management buffer targets systematically declined and regulatory risk tolerance (RRT) rose following the Great Financial Crisis, especially at banks experiencing a stronger increase in capital requirements.

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