The maintenance of secure system operations is a highly challenging task that becomes even more complex as electricity markets gain prominence. We use insights into the tight coupling between market and system operations under restructuring to characterize analytically the interrelationships between the secure power system operations and the performance of the electricity markets. Such a characterization allows the development of an integrated analytic approach to quantify the economics of secure power system operations. The new approach permits the quantification of the market performance as a function of security criterion selection and provides, for the first time, the means to give an economic justification for a modification in the security criterion. Furthermore, the approach is useful in the cost/benefit assessment of network improvements aimed at mitigating the market performance impacts of a set of contingencies and their associated security control actions. We illustrate the application of the proposed approaches on the large-scale ISO New England system in a number of studies. The results provide useful insights into the multi-faceted nature of issues that arise in today's tightly coupled market and system operations. In fact, the studies on the economics of system security provide important insights into the role of price-responsive demand and that of specific selected security control actions measured by the economic efficiency of the electricity markets. A key finding is that this efficiency need not decrease when a power system is operated under a stricter criterion, as long as there is effective price-responsive demand and appropriate utilization of the corrective control capabilities of the resources.