This seems to be a great balance between helping new banks get off the ground while keeping a tight oversight regime in place. For an interesting example of what happens when you deregulate your banking sector too much: I remember doing research on the Ukranian banking sector about 10 years ago, there were over 900 banks in operation. Many of them seemed to be oligarchs setting up banks and leveraging their capital to lend their own/their friend's corporation a ton of money. The borrower would then simply default on the loan and the bank would go bankrupt...