Introduction

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.

Questioning the Need for Disclosures

The book starts by asking the question why do we need mandatory disclosures.

Framework Development

First, it develops a framework using a Principal-Agent model that provides an economic rationale for such disclosures.

Analysis of Basel Regulations

Second, it analyses the requirements outlined in Basel banking regulations over three decades and finds support for the propositions outlined in the developed framework in all key BCBS pronouncements.

Empirical Evaluation

Last, the book empirically evaluates Pillar 3 disclosures and arrives at the surprising result that such disclosures do not seem to have an impact on bond investors.

Conclusion and Policy Implications

The book concludes by outlining the policy implications regarding the design, efficacy, implementation, and limitations of regulation in an economy.