Another dimension through which the future structure of the banking system may be affected is related to the treatment of SIFIs. The identification of SIFIs involves gauging, among other things, size, market shares, and the degree of interconnectedness between banks.
Limiting their size and interconnectedness, which SIFIs should have the incentive to do, will potentially lower concentration in the banking system and reduce the potential contagion that could result from a shock. Risk management for systemically important banks will also likely differ from the past, as SIFIs will be required to formulate recovery plans and regularly update them.