If it were, capital levels would have to be so high as to stymie the development of financial institutions. What therefore is the balance which has to be struck? And what are the accompanying requirements which must support capital requirements? These are important areas to be considered.
Too big to fail We have seen, even here in the Caribbean that there is such a thing as “too big to fail”, or rather, “too big to be allowed to fail”. There is currently a debate as to whether large financial entities should have a progressive scale of capital requirements, which require bigger entities to hold more capital pro-rata.