The new banking regulatory environment will lock banks into sustainable balance sheet ratios that will mean 50 or 60 per cent of assets funding will have to come from retail deposits. ING Direct chief financial officer Mark Mullington said this scenario would limit growth in the banking system and place an additional burden on small financial institutions.Speaking at the Australian Capital Market Forum in Sydney yesterday, Mullington said: "The rate of growth of assets funded on balance sheet will be limited to the growth in deposits, to keep that stable funding ratio in balance."Savings growing at five to eight per cent a year will not be enough to meet demand for loans."Mullington said small financial institutions were in a price war with big banks for deposits. At the same time they had limited access to other sources of funding. "The price of term debt issuance is prohibitive if you are not double A [rated]. Competition will continue to be hampered by the difficulties second tier banks have in gaining access to funding and the cost of that funding."