In the end, sounder and healthier banks will enhance financial stability. This, in turn, will benefit the entire financial sector, and hence also the MSME business. If you ask me if I think that intensifying regulation will solve all of the problems? No, it definitely won’t, I’m afraid!
If only, because intensifying regulation does not necessarily motivate the banking sector to move back towards its core task of servicing the real economy and its customers. Take, for example, proprietary trading. This is when a bank trades financial instruments with its own money instead of its customers’ money, sometimes even following an investment strategy it doesn’t advise to its customers.