The regulator requires banks to publicly disclose financial and other information, and depositors and other creditors are able to use this information to assess the level of risk and to make investment decisions. As a result of this, the bank is subject to market discipline and the regulator can also use market pricing information as an indicator of the bank's financial health.
Other articles related to "market discipline, markets":
... in 1934 to restore depositor trust into the financial markets following the devastation of the Great Depression ... Concerning market discipline, one can easily say that mispriced deposit insurance distorts the incentives of depositors to monitor bank risk taking activities ...
Famous quotes containing the words discipline and/or market:
“Building a conscience is what discipline is all about. The goal is for a youngster to end up believing in decency, and actingwhether anyone is watching or notin helpful and kind and generous, thoughtful ways.”
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