Toward a supply-side theory of financial innovation

Dan Awrey

Journal of Comparative Economics, 2013, vol. 41, issue 2, 401-419

Abstract: Innovation. The word is evocative of ideas, products and processes which have somehow made the world a better place. Prior to the global financial crisis, many viewed financial innovation as unequivocally falling into this category. Underpinning this view was a pervasive belief in the self-correcting nature of markets and their consequent optimality as mechanisms for allocating society’s resources. This belief exerted a profound influence on how we regulated financial markets and institutions.

Keywords: Financial innovation; Modigliani and Miller; OTC derivatives; Securitization; Structured finance; Swaps; Collateral swaps; Synthetic exchange-traded funds; ETFs; Dodd-Frank Act (search for similar items in EconPapers)
JEL-codes: A12 B26 D86 G18 G28 G38 K22 (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jcecon:v:41:y:2013:i:2:p:401-419

DOI: 10.1016/j.jce.2013.03.011

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