Such a regulatory treatmentalso favors an increase of leveraging and interconnectedness of the banking system, with apotential negative impact on its financial stability. The levy recently introduced by theGerman authorities, being based on the interbank and derivative exposures, could provide an incentive to reduce leverage and system interconnectedness, but the low level of the levymakes it unlikely that it will have a decisive influence on bank behavior.17 As a consequence, it does not fully offset the need to consider a possible revision of the current regulatory treatment for some interbank claims
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