2  BIS Review 39/2009  Banks, markets, and the crisis Banks are not the only game in town. In recent years, markets have grown to the point that they are now an important alternative for corporate and household finance.
From a financial system perspective, the deepening of markets is generally very welcome because it makes the system more robust and increases competition, which disciplines banking activity. While markets expand the choices and lower the prices available to financial consumers, they function differently from banks. Unlike banks, markets rely more completely on confidence for liquidity.