Toward a supply-side theory of financial innovation

Journal article

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.

Authors: Awrey, D

• Publication status: Published
• Journal: JOURNAL OF COMPARATIVE ECONOMICS
• Volume: 41
• Issue: 2
• Pages: 401-419
• Publication date: 2013-01-01
• DOI: 10.1016/j.jce.2013.03.011
• EISSN: 1095-7227
• ISSN: 0147-5967
• Keywords: Modigliani and Miller; Dodd-Frank Act; G5; K22; G38; A12; Swaps; Synthetic exchange-traded funds; Collateral swaps; D86; Financial innovation; ETFs; Securitization; G18; B26; Structured finance; OTC derivatives; G28