Over the last few decades, a
surge of financial innovation has occurred that has created hundreds of new financial products that are not well understood by the common consumer.
Despite the regulatory pushback, this subsector began to gain a large amount of traction, with many financial institutions jumping on the bandwagon to catch this new
wave of financial innovation.
But in the realm of finance, as much as we traders appreciate the opportunity to unpack and trade complexity in securities, structures and markets, we wonder if the overall
impact of financial innovation, including derivatives, structured products, high - frequency trading and communication advances, is a net negative, albeit with a possibly long delay before the drawbacks become visible» Paul Singer
More generally, development of the corporate bond market is simply a reflection of the ongoing
process of financial innovation and development, following, with a lag, trends that have been evident in the US for some time.
Because our estimates imply that following the Small Bang more hedging through CDS and subsequent safer lending took place, and that only banks properly hedged before they may take more risk, we provide first - hand evidence on the
benefits of financial innovation for risk mitigation.
There will be almost limitless opportunities for creative financial lawyering in the future; but financial creativity must be grounded in an understanding of, and appreciation for, some of the basic financial economic concepts and principles that have been steadily propelling the current
spate of financial innovation.
Li Lihui, former president of the Bank of China, one of the largest state - owned commercial banks in the country, told South China Morning Post, «regulators will certainly step in», if any
kind of financial innovations infringe upon the interests of consumers and affect the stability of the financial market.
Shapeshift describes itself as «A simple and beautiful
piece of financial innovation» which explains its fantastic features like you do not have to create accounts or sign up and provide personal information.
The next
wave of financial innovation «will deliver fundamental changes to the infrastructure and processes at the core of the financial services industry,» argues a new paper published this week...
While the negative impact
of financial innovation has been extensively covered, a new study of financial innovations before and during the last financial crisis indicates that financial innovations are not all bad.
A wave
of financial innovation that began in the 1970s has led to a proliferation of derivatives and other hybrid financial instruments that stubbornly defy simple classification as either debt or equity.