And other countries which seek tighter regulation all come across that arguement: "our financial system need to be able to compete in the world stage". But think about the nature of some of these firms, they have offices in most financial centres in the world. If New York becomes tougher about capital requirement, would they pull their offices out of New York? I highly doubt it. Follow that argument will allow banks to play governments against each other. On the other hand, there are of course costs to regulations, the key is to seek the best trade-off between tax-payer protection and less regulation. I think partitioning the commercial banks from investment bank is really not that heavy a burden on the banks, and of course, whatever the government comes up with, be sure that there will be lots of smart ambitious bankers looking for ways around them.