This has been seen most powerfully and immediately in the downward spiral of bank deleveraging and weak or negative economic growth in Europe. Further substantial costs are likely to arise from constraints on the ability of banks to provide credit, trade finance and risk management services to their customers. A modest reduction in economic growth during normal times may be a reasonable price to pay to avoid financial crises. Post-crisis regulation was supposed to prevent future failures and financial instability, at a small cost in terms of foregone economic growth. But the waves of regulatory reforms seem to have taken some countries and the global financial system beyond the ‘tipping point’ – the costs of ever more regulation have begun to exceed the benefits. In practice, regulatory reforms have exercised a substantial drag on economic growth, while their impact on the safety of the financial system remains uncertain.