3 Graduated capital surcharges have the additional policy benefit of providing these firms with an incentive to reduce the size and scope of their activities so as to present lesser risk to the financial system.
The U.S. banking agencies based post-crisis capital requirements on historical loss experiences so as to require banks to have a capital buffer that could absorb losses associated with a significant economic downturn and remain viable financial intermediaries in the eyes of customers, counterparties, and financial markets.