The market prices of bank securities, such as equities, provide important in- formation for market participants, for central banks with Önancial stability re- sponsibilities, and for bank supervisors, from at least Öve di§erent perspectives. First, a bankí s equity price may e§ectively summarise all the public informa- tion available from the bank, including potential risks, in one number. Second, when working under the e¢ cient-market hypothesis, banksísecurities prices at any point in time have a forward looking component in that they incorporate expectations of both positive and negative future earnings prospects. Third, the banksíshare price information is available at much higher frequency compared with accounting information. Fourth, as Önancial.
