Market discipline refers to the process by which market participants, such as depositors and shareholders, monitor the risks of banks, and take action to limit excessive risk-taking. ... This requires banks that have taken excessive risk to fail and for bank investors and depositors to share the losses when they do
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Market discipline refers to the process by which market participants, such as depositors and shareholders, monitor the risks of banks, and take action to limit excessive risk-taking. ... This requires banks that have taken excessive risk to fail and for bank investors and depositors to share the losses when they do