Market discipline – Market discipline describes a mechanism in which market participants have an incentive to monitor the risk behaviour of counterparties with the aim of readjusting their investment decisions accordingly. In the aforementioned case of securitisation, the risktaker might be penalised by its share holders and other counterparties if a lack of monitoring impairs his ability to assess credit risk properly.
A lack of financial education may also reduce the capacity of firms to reap the benefits from positive changes in the external environment. In Italy, the tax advantage for debt has been  BIS central bankers’ speeches  3  widely reduced since 2011 (by the introduction of the so called “Allowance for corporate equity”, ACE), and almost eliminated with subsequent interventions.