Making banks safer means fewer jobs, new research finds

New research quantifies the trade-off between making banks safer and keeping people employed. It turns out that stricter bank rules reduce financial risk but also increase unemployment.

For years, central banks have debated how much financial stability costs the broader economy. This paper puts a number on it. It turns out that a small reduction in bank risk leads to a larger increase in unemployment, giving regulators a clearer picture of the real-world cost of making banks safer.