Regulators’ response to the financial crisis of the past few years mainly punishes small community banks instead of the big ones.
In order to avoid a repetition of the past financial crisis, banks are forced to investigate risks more severely before lending money to potential clients in the USA.
However, this measure increases banks’ compliance costs and thereby affects particularly small banks who have less financial means to cover these costs.
This all results in small banks giving up while big banks get off rather easy letting others help them pay their dues.
Kelly Vercauteren
Source: wall street journal:
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