This means that stricter requirements may also reduce the banks’ readiness to take on any risks at all; that is, to lend. But that would slow economic momentum. Ultimately, this is also a balancing act.
However, it seems clear that additional efforts to expand banks’ capital base would be advisable, especially for systemically important banks and those that will just barely meet the Basel III requirements. But even stricter capital requirements cannot entirely prevent individual banks from collapsing. And this is okay. After all, the possibility of failure is essential in a market economy.