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The problem is that many banks are too big to fail. So we increase the reserves that banks must keep to protect against economic shocks. Result: small banks can
by gpvos 8y ago
The problem is that many banks are too big to fail. So we increase the reserves that banks must keep to protect against economic shocks. Result: small banks cannot manage anymore, no-one can enter the financial arena, more banks are too big to fail.
- occamrazor 8y agoActually the regulations already prescribe additional capital requirements for larger institutions, the so called SIFI.