With few, if any, benefits, raising the ceiling would risk incurring substantial net costs by expanding the safety net, increasing the government subsidy to banking, encouraging moral hazard, and reducing the incentive for market discipline.
Supply of credit to small business I now turn to my final topic for today - possible implications of the changing structure of the U.S. banking sector for the supply of credit to small businesses. In the United States and many other  4  BIS Review 73/2002  countries, consolidation in the banking industry has involved large numbers of small banks.