hazard to take excessive credit risks to increase profits. On the other hand, the same effect was measured in presence of a banking oligopoly in which banking sector was dominated by a restricted number of market operators encouraged by their market share and contractual power to set higher loan mean rates. An excessive number of market operators was sometimes deliberately introduced with a below market value selling to cause a price war and a wave of bank massive failures, subsequently degenerating in the creation a market cartel: those two phases had been seen as expressions of the same interest to collude at generally lower prices (and then higher), resulting possible because of a lack of regulation ordered to prevent both of them. Banks are the entities most likely to be exposed to valuation risk as a result of their massive holdings of financial instruments classified as Level 2 or 3 of the fair value hierarchy. In Europe, at the end of 2020 the banks under the direct supervision of the European Central Bank (ECB) held fair-valued financial instruments in an amount of €8.7 trillion, of which €6.6 trillion classified as Level 2 or 3. Level 2 and Level 3 instruments respectively amounted to 495% and 23% of the banks' highest-quality capital (so-called Tier 1 Capital). As an implication, even small errors in such financial instruments' valuations may have significant impacts on banks' capital. In February 2020 the European Systemic Risk Board warned in a report that substantial amounts of financial instruments with complex features and limited liquidity that sit in banks' balance sheets are a source of risk for the stability of the global financial system. In Europe, at the end of 2020 the banks under the direct supervision of the European Central Bank (ECB) held financial instruments subject to fair value accounting in an amount of €8.7 trillion. Of these, €6.6 trillion were classified as Level 2 or 3 in the so-called Fair Value Hierarchy, which means that they are potentially exposed to valuation risk, i.e. to uncertainty about their actual market value. Level 2 and Level 3 instruments respectively amounted to 495% and 23% of the banks' highest-quality capital (so-called Tier 1 Capital). As an implication, even small errors in such financial instruments' valuations may have significant impacts on banks' capital. See also :Category:Systemic risk Bank run Financial crisis Macroprudential policy Modern portfolio theory Moral hazard Risk modeling