In addition, even complete local subsidiarization might not protect a foreign banking operation from suffering some contagion if its parent is under stress. Thus, the quality of home country regulation may have some bearing even under the host country model. Not surprisingly, the home country model presents essentially the obverse set of advantages and limitations.
Having a consolidated set of capital requirements and a single supervisor allows for the quickest deployment of capital and liquidity where it is most in demand, or most needed to relieve stress, and minimizes compliance costs.