• Corpus ID: 16357075

Market Discipline and Subordinated Debt: A Review of Some Salient Issues

  title={Market Discipline and Subordinated Debt: A Review of Some Salient Issues},
  author={Robert R. Bliss},
  journal={Economic Perspectives},
  • R. Bliss
  • Published 22 March 2001
  • Economics
  • Economic Perspectives
Introduction and summary Academics and regulatory economists have long been concerned that mispriced deposit insurance undermines monitoring of banks by investors and increases incentives for bank risk-taking. Government supervision provides a partial substitute for the private corporate governance services provided by a firm's shareholders and creditors. As financial firms have become more complex, however, government supervisors have found it more difficult to monitor them in a timely manner… 

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