The financial crisis, which is just about to reach its tenth anniversary, has shown us that the failure of a single institution is on its own enough to trigger a chain reaction throughout the entire sector. And that's why we need rules – even in the places they cause the most pain. Regulation and supervision help to keep the financial system in order.
Smart regulation ensures that financial institutions can still pursue their business, but that they are appropriately protected against the biggest risks. This then safeguards the economy, consumers and the financial system itself against turbulence. Therefore, the reason we can't give banks and savings banks full rein is because of the important part they play in the economic cycle.