Why on earth can a state-chartered bank, or any other bank for that matter, operating in my state, be allowed to lend to well-rated corporations elsewhere, or to sovereign governments, holding less equity than when lending to our own local SMEs and entrepreneurs?
I mean that does not sound right. That sounds like a regulatory tax on my “risky” borrowers, those who already get less credit and pay higher risk premiums, and a regulatory subsidy to strange “safe” borrowers, those who already get larger loans at cheaper rates.
If I were a bank regulator, the last thing I do, would be to regulate against the fair access to bank credit of "the risky" of my own hometown.