The purpose of regulation is to build in safeguards against failure of financial institutions and financial markets. Financial firms such as banks are different from non-financial firms, and financial markets are different from non-financial markets. The important difference is that financial firms are all interconnected, and a disruption in any one part of the system spreads rapidly through the entire system.
Illustratively, a run on one bank could potentially trigger a run on other banks spreading and deepening the contagion. In contrast, the failure of a non-financial firm such  BIS central bankers’ speeches  5  as a manufacturing company hurts the company’s equity holders and creditors but does not hurt people beyond that. We conduct bank regulation through a whole host of prescriptions.