Above and beyond this implication that issuance costs are risk sensitive, this empirical evidence suggests that direct market discipline is substantial enough in the subordinated debt market to affect actual decisions made by banking organizations. The evidence with respect to indirect market discipline is also encouraging.
The idea is to build on the existing national schemes and then gradually move towards a European construction that would be fully in place by 2024. While the introduction of the third pillar is generally accepted in  principle, controversy has arisen recently regarding its timing and negotiations are at a standstill due to the opposition of some countries.