Centralized vs Decentralized Banking

I think there is a need for two set of regulations: centralized for major bank and decentralized for smaller banks. Big banks are basically oligopolies and also the ones that benefit most from the government support.

Sure, there is a good reason for that: if a big bank fails, there is a huge impact on the national economy. So, their mistakes cost a lot, thus they should be held accountable for their actions and thus highly regulated.

Still, there are smaller banks that suffer from over-regulation (more on this here). They receive zero government support and have to comply with the same regulations as the bigger banks. So community banks end up in a less favorable position.