17 See Constâncio, V. (2016), Challenges for the European banking industry, lecture at the Conference on  “European Banking Industry: what’s next?”, organised by the University of Navarra, Madrid, 7 July 2016. 18 Cline, W. (2017), “The economic cost of weakening capital requirements for large banks”, Peterson International  Institute of Economics, September 2017.
Cline calculates that for US GSIBs the LR would come down from the present 7.1% to 5.6% or 5% with induced effects. This would increase the probability of crises and, in different scenarios, this could produce a GDP loss between 0.5 to 1.4%. 19 Cline, W. (2017), “The right balance for banks: theory and evidence on optimal capital”, Peterson International  Institute of Economics.