It’s how every country is set up, including the US. Having smaller banks doesn’t affect systemic risk much if there’s still big banks that are too big to fail,

It’s how every country is set up, including the US. Having smaller banks doesn’t affect systemic risk much if there’s still big banks that are too big to fail, and the US has plenty of those. Even if we lived in a world where big banks didn’t exist, the benefit to systemic risk might be smaller than you’d think, as bank failures tend to be correlated.