Mandatory Financial Disclosures and the Banking Sector: A Principal-Agent Framework

This book explores mandatory disclosures. The book raises questions regarding the efficacy of market discipline and reaches a conclusion that seems to be borne out by the recent failure of Silicon Valley Bank and Credit Suisse. The book starts by asking the question why do we need mandatory disclosures. First, it develops a framework using a Principal-Agent model that provides an economic rationale for such disclosures. Second, it analyses the requirements outlined in Basel banking regulati...