An ancillary rationale is that additional capital requirements could help offset any funding advantage derived from the perceived status of such institutions as too-big-to-fail. Of course, if a SIFI could be resolved in an orderly fashion, negative externalities could be greatly reduced. The special resolution regime in Dodd-Frank aims at just such an outcome.
The FDIC is investing considerable time and talent into making that outcome more likely, and thus bringing a greater measure of market discipline to large financial firms more generally. Together with the FDIC, the Federal Reserve will be reviewing the resolution plans required of larger institutions by Dodd-Frank and, where necessary, seeking changes to facilitate the orderly resolution of those firms.