Unjust and contrary to financial inclusion as they impede fair access to bank credit of "the risky", thereby killing opportunities and increasing the inequalities.
I clearly prefer when regulators do not distort, because that can have serious unexpected consequences, but, if they absolutely "must", then at least have them do so with a good purpose in mind, like planet-earth sustainability, job generation and poverty reduction weighted equity requirements for banks. Why not capital requirements for banks based on SDGs and MDGs weights? Why not have SDGs and MDGs rating agencies?
But, under no circumstances allow bank regulators to distort on their own. They need crystal clear government instructions from the governments before doing so... so that everyone can be held accountable.
PS. AND LET'S HAVE AN UNIVERSAL BASIC INCOME FUNDED WITH CARBON TAXES