Large banks have to be more policy driven. It is the only way they can manage risk. There is actually a safety benefit to spreading a bank out geographically. By capping loan exposure by geography and collateral type, they can avoid getting hurt by a localized problem much better than a smaller bank.
However, there are several sources of risk related to large banks. Seems like there was a loss of several billion dollars by an Asian bank a few years ago related to a commodity trading deal. An unusual, isolated occurence like that can still take a large bank down. The probablility is exceptionally low, but possible. Large banks are so large and complex, it is a monumental management oversight challenge. If policies are wrong-headed and risky, as has been the case with lax mortgage origination, which extends to mortgage backed securities and leveraged mortgage pools or warehouse lines, the risky policy can be repeated hundreds of thousands of times. The banks were making so much money from origination and securitization, they ignored the risk.
One of the big problems now, seems to me, seems to be the power and influence of the large banks and financial industry over politicians, especially Congress. Their shirts are threadbare from scratching each other’s backs.
Well... It is pretty clear they aren't going to let some hillbilly in fly over country tell them how to run their banks..