Regulating banks based on their risk to the banking system can help prevent financial crises. By setting capital requirements that match each bank's risk contribution, systemic risk can be reduced. Two models were used to measure risk and allocate it to banks, showing that macroprudential capital requirements can differ significantly from current levels. These requirements can lower the chances of individual bank defaults and systemic crises by 25%. Implementing this approach to bank regulation can greatly improve financial stability.