The heads of Wall Street's largest firms continue to warn that post-crisis financial reforms are hobbling banks and leaving them “under assault,” as JPMorgan Chase CEO Jamie Dimon put it. But a new study from the International Monetary Fund suggests that might not be bad news.

In the U.S. and other advanced economies, IMF economists say, the financial sector has become a drag on economic growth--a conclusion that provides grist for ongoing debates about the proper scope of finance in contemporary society, even as American lawmakers mull a regulatory rollback.

The study examines how robust financial sectors affect emerging economies, cautioning that developing countries like Malaysia and Morocco might not want to follow the American path too closely.

“The U.S. experience shone a spotlight on the dangers of financial systems that have grown exponentially and beyond traditional banks,” the authors wrote in a blog post. Once the financial sector penetrates deeply enough, the economists say, it creates instability and puts a damper on growth.  

Using data from 176 countries dating back to 1980, the authors construct a “financial development index” that quantifies how thoroughly the banking sector has permeated an economy. At a certain point on the bell curve, countries receive a grim diagnosis: “too much finance.”

Countries at the lower end of the spectrum like Gambia still stand to benefit from a stronger financial sector. Emerging economies enjoy rising incomes and higher-returning investments when their banking industry matures.

But as advanced economies like the U.S. and Japan round the top of the curve, the relationship between financial depth and economic well-being reverses. Productivity suffers, investments become less efficient and the threat of financial crises looms larger.

Though the authors say there isn’t an exact point at which a country can be diagnosed with “too much finance,” they found a range at which the benefits of financial development start to sour. The U.S. sits well past that point.

The study isn’t the first to raise concerns about excessive financial growth. Earlier this year, a pair of economists from the Bank for International Settlements showed that overdeveloped banking sectors siphoned talent from the real economy and diverted investments toward less productive ends.

The new study, titled “Rethinking Financial Deepening: Stability and Growth in Emerging Markets,” also sheds new light on the previous IMF paper “Too Much Finance?”, which made a splash when it was published in 2012. That paper posited that when private debt levels become larger than a country’s GDP, economic output diminishes.

The new study provides a more nuanced measure of financial development. One of the most pertinent findings: Prudent financial regulation doesn’t just protect against cataclysms like the 2008 crisis, but might actually lift the brakes on flagging economies.

“One view is that tighter and more regulation to help safeguard financial stability can hamper financial development,” the authors write. “This study provides a new angle…. Better regulation is what promotes financial stability and development.”