This then also makes it easier to finance a larger compliance department. Smaller, regionally based institutions, however, cannot normally rely on these economies of scale or a strong risk appetite for a source of income.
Seen from an individual business perspective, the cost of regulation is similar or even higher for these banks, but their ability to take advantage of these complex strategies is somewhat weaker. In other words, the complicated risk-oriented approach favours banks with a large organisation, whose activities are more complex and which take on greater risks.