For over a century, economists and policy makers have debated the relative merits of bank-based versus market …-based financial systems. Recent research, however, argues that classifying countries as bank-based or market is not a very fruitful … robustly linked with economic growth, there is no support for either the bank-based or market-based view …

exposure in bad times. We apply this idea to bank risk measurement. We find that banks with high accounting return on equity … triggered by the collapse of Silicon Valley Bank. ROE predicts systematic tail risk much better than conventional measures based …