A very good argument and one I cannot see a refutation of.
To Anglicise it.
We set maximum bank size at £100 billion. HBOS is at £99 billion. HBOS goes bust.
How do we rescue bust banks? We get someone else to take them over (no, we really do not like going through proper bankruptcy proceedings for banks).
So Lloyd\’s takes over HBOS. But the combination is now obviously over our £100 billion limit. So we must either not allow Lloyd\’s to take over HBOS or we must insist that a couple of years down hte line Lloyd\’s must sell it again.
In which case Lloyd\’s will refuse to take over HBOS in the first place.
So we cannot in fact limit bank size and also use mergers or takeovers to rescue bad banks.