Some Thoughts on Financial Innovation and Financial Crises
Financial innovation, which was originally introduced for a positive aim, over time has actually had relevant negative effects on the economy. This occurred because it encouraged intermediaries to change their way of operating, allowing them to modify their solvency without changing radically their external shape. Financial innovation, which developed on account of both the need to finance the growing USA external debt and the tendency of American families to incur into excessive debts, is certainly the main cause lying behind the recent financial crises. In the future, these can be avoided only by means of a strict regulation of financial markets.
Volume (Year): 11 (2009)
Issue (Month): 26 (June)
|Contact details of provider:|| Postal: 6 ROMANA PLACE, 70167 - BUCHAREST|
Web page: http://amfiteatrueconomic.ase.ro/
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Elul Ronel, 1995. "Welfare Effects of Financial Innovation in Incomplete Markets Economies with Several Consumption Goods," Journal of Economic Theory, Elsevier, vol. 65(1), pages 43-78, February.
- Houweling, Patrick & Vorst, Ton, 2005.
"Pricing default swaps: Empirical evidence,"
Journal of International Money and Finance,
Elsevier, vol. 24(8), pages 1200-1225, December.
- Jameson, Mel & Dewan, S. & Sirmans, C. F., 1992. "Measuring welfare effects of "unbundling" financial innovations: The case of collateralized mortgage obligations," Journal of Urban Economics, Elsevier, vol. 31(1), pages 1-13, January.
- Adam B. Ashcraft & João A. C. Santos, 2007. "Has the credit derivatives swap market lowered the cost of corporate debt?," Staff Reports 290, Federal Reserve Bank of New York.
- Hull, John & Predescu, Mirela & White, Alan, 2004. "The relationship between credit default swap spreads, bond yields, and credit rating announcements," Journal of Banking & Finance, Elsevier, vol. 28(11), pages 2789-2811, November.
- Robert C. Merton, 1995. "A Functional Perspective of Financial Intermediation," Financial Management, Financial Management Association, vol. 24(2), Summer.
When requesting a correction, please mention this item's handle: RePEc:aes:amfeco:v:11:y:2009:i:26:p:522-533. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Valentin Dumitru)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.