It's not the absolute size that's a problem but rather the degree of leverage. If you've borrowed $30 for every $1 in capital (like Bear Sterns did) and your assets all drop by about 3% then you immediately become insolvent. They thought they could prevent that from happening through clever hedging and diversification but it didn't work. A possible solution might be to set hard legal limits on size versus leverage for financial companies. But in practice I'm not sure how practical it would be to write regulations to enforce that.