Another danger is that pegged exchange rates reduce the incentives for financial institutions and corporate entities to hedge against foreign exchange risk, with predictable consequences in the event that the peg proves to be unsustainable. For these reasons, a new orthodoxy seems to be emerging an exchange rate policy.
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.