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Trends in Financial Innovation and their Welfare Impact: an Overview

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  • Franklin Allen

Abstract

There is evidence that financial innovations are sometimes undertaken to create complexity and exploit the purchaser. Thus financial innovation does have a dark side. As far as the financial crisis is concerned, securitisation and subprime mortgages may have exacerbated the problem. However, financial crises have occurred in a very wide range of circumstances, where these and other innovations were not important. There is evidence that financial liberalisation has been more of a problem. There are many financial innovations that have had a significant positive effect including venture capital and leveraged buyouts and innovations to fund environmental and health improvements.

Suggested Citation

  • Franklin Allen, 2012. "Trends in Financial Innovation and their Welfare Impact: an Overview," European Financial Management, European Financial Management Association, vol. 18(4), pages 493-514, September.
    • Handle: RePEc:bla:eufman:v:18:y:2012:i:4:p:493-514
    DOI: 10.1111/j.1468-036X.2012.00658.x
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    References listed on IDEAS

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    Cited by:

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    3. Chishti, Muhammad Zubair & Sinha, Avik, 2022. "Do the shocks in technological and financial innovation influence the environmental quality? Evidence from BRICS economies," Technology in Society, Elsevier, vol. 68(C).
    4. Brei, Michael & Ferri, Giovanni & Gambacorta, Leonardo, 2023. "Financial structure and income inequality," Journal of International Money and Finance, Elsevier, vol. 131(C).
    5. Tereza Tykvová, 2018. "Venture capital and private equity financing: an overview of recent literature and an agenda for future research," Journal of Business Economics, Springer, vol. 88(3), pages 325-362, May.
    6. Vokata, Petra, 2021. "Engineering lemons," Journal of Financial Economics, Elsevier, vol. 142(2), pages 737-755.
    7. Ewa Lechman & Adam Marszk, 2014. "Reshaping financial systems. New technologies and financial innovations - evidence from the United States, Mexico and Brazil," GUT FME Working Paper Series A 20, Faculty of Management and Economics, Gdansk University of Technology.
    8. Unsal, Omer, 2023. "Corporate crimes and innovation: Evidence from US financial firms," Economic Modelling, Elsevier, vol. 120(C).
    9. Lechman, Ewa & Marszk, Adam, 2015. "ICT technologies and financial innovations: The case of exchange traded funds in Brazil, Japan, Mexico, South Korea and the United States," Technological Forecasting and Social Change, Elsevier, vol. 99(C), pages 355-376.
    10. Jing Jian Xiao & Chunsheng Tao, 2020. "Consumer finance/household finance: the definition and scope," China Finance Review International, Emerald Group Publishing Limited, vol. 11(1), pages 1-25, June.
    11. Joanna Błach, 2020. "Barriers to Financial Innovation—Corporate Finance Perspective," JRFM, MDPI, vol. 13(11), pages 1-23, November.
    12. Peterson K. Ozili, 2022. "Assessing global interest in decentralized finance, embedded finance, open finance, ocean finance and sustainable finance," Asian Journal of Economics and Banking, Emerald Group Publishing Limited, vol. 7(2), pages 197-216, September.
    13. Ivan Diaz-Rainey & John Ashton & Maz Yap & Murat Genc & Rosalind Whiting, 2015. "The determinants of regulatory responses to risks from financial innovation: Survey evidence from G20," Working Papers 15001, Bangor Business School, Prifysgol Bangor University (Cymru / Wales).
    14. Pandey, Dharen Kumar & Hunjra, Ahmed Imran & Hassan, M. Kabir & Rai, Varun Kumar, 2023. "Venture capital financing during crises: A bibliometric review," Research in International Business and Finance, Elsevier, vol. 64(C).
    15. Sant'Anna, Dário A.L.M. & Figueiredo, Paulo N., 2024. "Fintech innovation: Is it beneficial or detrimental to financial inclusion and financial stability? A systematic literature review and research directions," Emerging Markets Review, Elsevier, vol. 60(C).
    16. Anna Sławik & Joanna Bohatkiewicz-Czaicka, 2022. "Financial Innovation of Mass Destruction—The Story of a Countrywide FX Options Debacle," Risks, MDPI, vol. 10(2), pages 1-17, January.
    17. Ozili, Peterson K, 2022. "Embedded finance: assessing the benefits, use case, challenges and interest over time," MPRA Paper 115775, University Library of Munich, Germany.
    18. Sanatkhani, Mahboobeh & Vasaf, Esmaeil, 2014. "Dynamics of innovation and efficiency in banking system: An application of SFA and meta-frontier method," MPRA Paper 64840, University Library of Munich, Germany.

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