If a bank no longer has a sustainable business model, it should indeed leave the market. The important thing is that the process is orderly, without much turmoil and without heavy losses for the bank’s creditors.
Given our policy framework, when the government changes fiscal policy, it needs to think of how these changes will affect inflation and, consequently, interest rates. Similarly, the Bank of Canada needs to consider how changes in fiscal policy will affect demand and inflation, and thus its setting of interest rates.