The poor capitalization of potential acquirers can also drive a wedge between their willingness and ability to pay for a failed bank. In this manner, bank capital being at healthy levels also has a system-wide loss-absorption role by helping sell weak banks to healthy ones in an efficient manner.
Given this criticality of bank capital in absorbing losses, it is natural why minimum bank capital requirements are in place globally and why capital becomes one of the most important factors for supervisors to monitor.