But capital shields against losses only up to a point. And in any case, if the business model is no longer viable, the bank must be allowed to fail – otherwise, incentives are stunted for bank managers to exercise prudence and to improve efficiency. Regarding the development of resolution regimes, progress has been made, although in some countries more so than in others.
I think the difference in the share of business services in modern services between developed and Asian countries is a result of whether the production process in each country has a service process to create high value-added and whether business service sectors have evolved enough to support production activities.