But this is by design, in accordance with the principle – reflected in the Dodd-Frank Act – that the largest, most complex institutions should be subject to stricter regulation precisely because they are more complex and because their failure would have greater negative externalities for the financial system and the economy more generally.
Thus, if there is a modest effect on industry structure, it would be an intended – rather than unintended or undesirable – consequence of the regulation. In general, at least at the levels of minimum long-term debt that are being discussed in various international forums, the proposal would not seem to carry significant hurdles to realizing available economies of scope and scale.