To name just one example, let’s take a look at a study carried out by the Federal Reserve Bank in Minneapolis on the effects of regulation on small American banks. The thrust of this study was to find out the extent to which these institutions could cope with rising personnel costs resulting from stricter regulation. The results are sobering.
An additional requirement of just two full-time positions would send around 25 % of these small institutions into the red.6 This example shows that we, as supervisors, also need to be careful that regulation does not fundamentally overwhelm any group of institutions - either in the United States or here in Germany.