Large banks have potential beyond their size

The probability of a financial system collapsing as a result of a large bank collapse exceeds 16% while impact is highly localised when a small bank fails.

When multinational banks falter, financial loss and a drop in confidence can quickly consume a financial system, researchers at Princeton University have found.

The study suggests that large banks should maintain capital based not only on its own risk, but also on its importance.

Read more at Princeton University