We present a model that describes how different types of bank regulation can interact to affect
the likelihood of fire sales in a crisis. In our model, risk shifting motives drive how banks
recapitalize following a negative shock, leading banks to concentrate their portfolios.
Regulation affects the likelihood of fire sales by giving banks the incentive to sell certain assets
and retain others. Ex-post incentives from high risk weights and the interaction of capital and
liquidity requirements can make fire sales more likely. Time-varying risk weights may be an
effective tool to prevent fire sales.