Bank reforms strengthen market discipline, ECB actions weaken it: study.
The study looked at how new laws and regulations affected how companies put their money in banks in Europe. They found that after certain laws were passed, companies were more careful about choosing banks that were less risky. This means that the new rules helped make banks more accountable to their customers. However, when the European Central Bank gave banks easier access to money, companies were less worried about picking safer banks. So, the study shows that certain laws can make banks safer for everyone.