In the midst of Japan’s financial crisis, we experienced a substantial shift of deposits from small banks to money center banks.
If a SIFI framework and the capital surcharge make people believe that SIFIs are much safer than non-SIFIs, a SIFI framework might even accelerate the shift of deposits in a stressed situation, but the surcharge might discourage SIFIs from fully implementing the credit intermediation functions formerly performed by non-SIFIs.