Thus, particularly to the degree that there are correlations in the risks associated with loans held across such institutions, there should be a macroprudential objective in the regulation of at least some of these firms. Of course, I would not lump all 80 of these institutions into the same category for purposes of specifying the aims of regulation.
In particular, only a small fraction of these firms have a significant enough systemic footprint that their stress or failure would impose sizable negative externalities on the rest of the financial system. And the lines delineating the possible categories are not as easy to draw as for community banks and LISCC firms.