With the introduction of Basel II in 2004, “market discipline” became one of the Basel Committee's three pillars of prudential regulation. Although many academic papers have sought to test for the presence of effective market discipline in banking, few have dealt fully with the question....

Bank and securities regulators operate with different attitudes about the appropriate regulation of financial institutions and markets. Bank regulators' prudential oversight protects depositors from worrying about the repayment of their bank claims. In contrast, securities market regulators tend...

Silicon Valley Bank (SVB) failed on March 10, 2023, from a depositor run set off by massive unbooked securities losses that became salient only when the firm filed for a stock issue intended to replace some realized, but previously un-noticed, capital losses. The unprecedented increase in market...