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Prospects for two-tiered banking regulation in Europe
The European Union’s complex and lengthy set of rules for banks is putting a burden on small lenders, which often form the backbone of a country’s banking sector. The solution, some propose, is to have a two-tiered system in which the banks that are “too big to fail” must follow the most stringent regulations, while simpler, less complicated rules apply to the smaller players. Such a system is already being used in the United States. Could Europe follow?