Recent International Financial Innovations: Implications for Financial Management (original) (raw)

Financial Innovations in International Financial Markets

1987

The central theme of this paper is that financial innovation has become a major force effecting the United States and other developed economies. The common features of the process include product innovation, securitization, liberalization of domestic financial market practices, globalization of markets, and increased competition among financial institutions. The paper offers a review of the product and process changes that have occurred in international financial markets, an analysis of the factors leading to these changes, and an examination of the implications for both financial market participants and macroeconomic policy makers.

Theorems and Theories of Financial Innovation: Models and Mechanism Perspective

Innovation is basic need of the hour to attract new customers to the financial markets. "Financial Innovation" means finding new products and new features for existing financial products. Thus creating a new financial product or adding new features to existing financial product is the central theme of financial engineering. Hence, the innovative products should try to reduce financial risk and it should aim to reach "financial optimization". Innovation is mainly driven by modern Globalization and investors and government resulting in exposing to new and wider international risk, innovation becomes a new tool to solve, manage and transfer the entire extra burden. The deregulation of banking systems, in particular, promotes economic growth through improved allocation, efficiency and a reduction of financial service costs.

Financial innovation and the management and regulation of financial institutions

Journal of Banking & Finance, 1995

New security designs, improvements in computer and telecommunications technology and advances in the theory of finance have led to revolutionary changes in the structure of financial markets and institutions. This paper provides a functional perspective on the dynamics of institutional change and uses a series of examples to illustrate the breadth and depth of institutional change that is likely to occur. These examples emphasize the role of hedging versus equity capital in managing risk, the need for risk accounting and changes in methods for implementing both regulatory and stabilization public policy.

Innovation changes and the traditional financial sector

Humanities & Social Sciences Reviews, 2022

Purpose of the study: The main objectives of this work are to analyze the innovation process in general and financial Innovation in particular, during which potential effects will appear on the financial structures of economic units and considering the recent financial events of the crisis of the subprime discuss whether financial Innovation is a source of growth or, on the contrary, is a source of financial instability. Methodology: The financial crisis has cast a shadow over recent financial innovations, particularly those that call for risk elimination. This research used secondary methods for innovation changes and traditional financial sectors. The secondary research method will collect data through google, websites, books, and other sources. Main findings: The main goal of financial technologies offered by entities in this sector is to improve the efficiency and availability of financial services, both from the customer and the perspective and a financial institution. The digi...

Innovation in the International Financial Markets

Journal of International Business Studies, 1981

New financial techniques and instruments are created when both the demand for and the supply of those instruments become sufficiently large. New financial instruments appear almost always to represent new combinations or packages of a relatively small number of financial services. In the international context these packages are designed to cope with controls on international financial transactions and with the peculiar interest and exchange risks faced by international firms and banks. This approach, when applied to a wide range of new international instruments, seems to explain why some have failed and others have succeeded.

The Impact of Financial Innovation and Risk Management on Economic Performance

1998

The last 25 years have witnessed extensive financial innovation and this had led to revolutionary changes in the international financial system. It is true that financial innovation has been going on since the 17th century and most of the products developed during the last two decades, although mentioned as new, are only versions of much older products. When the history of financial innovation is studied, it is seen that the seemingly new instruments, such as options and futures are not entirely new. For example, organised futures exchanges were established in Chicago, Frankfurts and London in the 19th century. Options and futures-like contracts in Amsterdam and forward contracts in rice in Japan were traded in the 17th century. However, the proliferation of organised markets in derivatives securities around the world during the last two decades is unparalleled in history. Miller (1992) describes the 1970-1990 period as unique in history, in that “no 20-year in financial history has...