Brainard noted that neither Congress nor regulators have specified caps in size for large financial firms. She explained:
The private sector may be in a better position to judge the market benefits associated with economies of scope and scale and business models associated with particular banking organizations. [The] public sector is likely to be a better judge of the risks that their size, interconnectedness, and complexity pose to the financial system.
She added that the U.S. financial system is “more resilient and dynamic” in part due to its large number of banks with different sizes and business models. She said:
That diversity is one of the hallmarks of the U.S. system, which distinguishes it from many other advanced economies. Accordingly, we want to make sure that our regulatory framework supports banks in the middle of the size spectrum, as well as community banks, and the customers they serve.
Read the speech.