dunnettreader + financial_innovation   57

Iryna Stewen & Mathias Hoffmann - Holes in the Dike: the global savings glut, US house prices & the long shadow of banking deregulation (2015 wp)
Verein für Socialpolitik / German Economic Association in its series Annual Conference 2015 (Muenster): Economic Development - Theory and Policy with number 112834. -- Abstract -- We explore empirically how capital inflows into the US and financial deregulation within the United States interacted in driving the run-up (and subsequent decline) in US housing prices over the period 1990-2010. To obtain an ex ante measure of financial liberalization, we focus on the history of interstate-banking deregulation during the 1980s, i.e. prior to the large net capital inflows into the US from China and other emerging economies. Our results suggest a long shadow of deregulation: in states that opened their banking markets to out-of-state banks earlier, house prices were more sensitive to capital inflows. We provide evidence that global imbalances were a major positive funding shock for US wide banks: different from local banks, these banks held a geographically diversified portfolio of mortgages which allowed them to tap the global demand for safe assets by issuing private-label safe assets backed by the country-wide US housing market. This, in turn, allowed them to expand mortgage lending and lower interest rates, driving up housing prices. -- downloaded via iPhone to DBOX
banking  financial_crisis  deregulation  US_economy  downloaded  financial_regulation  global_imbalance  capital_markets  post-Cold_War  financial_system  interstate_banking  savings  house_prices  securitization  financial_innovation  interest_rates  mortgages  international_finance  capital_flows  community_banks  paper  21stC  economic_history  competition-interstate  NBFI 
august 2016 by dunnettreader
R. Esteves - The Political Economy of Global Financial Liberalisation in Historical Perspective (2011) Oxford Economic and Social Sciences WP
This paper is a first attempt to garner the theory and evidence on the political economy of the first wave of financial liberalisation during the nineteenth and early twentieth century, and of its demise after World War I. Not everyone gained from the process of globalisation (of trade, labour, and finance), which brought about important changes in the structure of the economy and the distribution of income in nations across the world. This paper explores how the economic incentives generated by these dislocations translated, through the political system, into choices about openness to foreign capital and financial integration. The period before World War I is remarkable by the almost absence of restrictions on cross-border capital flows, which may explain the little attention it has received in the historical literature, compared to the extensive study of trade protectionism in this period. After the War, many countries experimented with capital controls which varied in nature and intensity and were intensified during the Depression. Despite the attempt made here to reconcile these stylized facts to models of political economy, the analysis requires a better empirical foundation and some suggestions for further research are also proposed. - Downloaded via iPhone to DBOX.
financial_regulation  economic_growth  pre-WWI  20thC  protectionism  downloaded  gold_standard  international_finance  financial_system  trade-policy  trade  19thC  capital_flows  capital_controls  globalization  deregulation  free_trade  paper  economic_history  financial_innovation  political_economy 
august 2016 by dunnettreader
What It's Worth - Building a Strong Financial Future
Americans everywhere struggle to build strong financial futures for themselves and their families. The new book, What It's Worth, provides a roadmap for what families, communities and our nation can do to move forward on the path to financial well-being.
Collection of essays by people working on financial inclusion, asset-building etc. - downloaded via iPhone to DBOX
gig_economy  education-finance  philanthropy  credit  usury  financial_innovation  US_society  inequality-wealth  local_government  pensions  corporate_citizenship  mobility  banking  wages  health_care  access_to_finance  housing  financial_regulation  report  social_entrepreneurs  poverty  downloaded  welfare  US_economy  US_politics  families  mortgages  segregation  inequality  NBFI  unemployment  US_government 
april 2016 by dunnettreader
Quaker bankers: building trust on the basis of sincerity, reciprocity and charity | Magic, Maths & Money - Feb 2016
This post follows discussions of the norms sincerity, reciprocity and charity in financial markets. It suggests that the success of Quaker finance, that funded… Tracks the importance of Quaker-owned banks to the development of UK financial system - the number of big-name banking families with Quaker founders is striking. Their personalized methods of working on reputation (theirs and their borrowers) based on shared standards of probity and transparency, disciplined by membership in the Quaker community - allowed them to not only grow in the loan business, but become big in the bills market. The Quaker method of collecting views re appropriate moral life practices, which were documented and circulated among the members - and set mutual expectations for ethical practices, including areas like bookkeeping and full disclosure. The Quaker firms were central to the system of country banks, capable of providing liquidity to halt bank runs, wind down problem institutions etc. Their bills business didn't survive the switch to the Bank of England becoming lender of last resort in the 1844 crisis. And their information advantages don't seem to have remained a competitive advantage as it had been in the pre Napoleonic_Wars era.
Instapaper  economic_history  financial_innovation  banking  17thC  18thC  19thC  British_history  Quakers  dissenters  Industrial_Revolution  ethics  norms  norms-business  accounting  accountability  reputation  disclosure  information-intermediaries  information-markets  money_market  Bank_of_England  country_banks  financial_crisis  bank_runs  lender-of-last-resort  from instapaper
february 2016 by dunnettreader
Monetary history - rural finance in northwest Europe from c 1400 | Real-World Economics Review Blog
a) Since at least 1400 rural lending and borrowing was at least in some regions common and tied to the life cycle of households and families, which (though…
Instapaper  economic_history  15thC  16thC  17thC  Europe-Early_Modern  financial_innovation  rural  Netherlands  agriculture  family  inheritance  marriage  households  collateral  banking  from instapaper
november 2015 by dunnettreader
Guillaume Vuillemey, review - Nicolas Buat, John Law: La dette ou comment s’en débarrasser - La Vie des idées - 8 juillet
Recensé : Nicolas Buat, John Law – La dette ou comment s’en débarrasser, Les Belles Lettres, Collection « Penseurs de la liberté », 2015, 272 p., 21 €.
-- Mots-clés : dette | monnaie | banques | XVIIIe siècle -- John Law a laissé son nom associé à un scandale financier considérable. Nicolas Buat retrace sa vie aventureuse, et ses projets ambitieux pour dynamiser l’économie et éteindre la dette de la France. -- Que l’on cherche à tirer de l’histoire de grands enseignements, ou que l’on se satisfasse d’y contempler une galerie de portraits et de tableaux sans conséquences pour notre temps, on ne peut demeurer indifférent au personnage de John Law. Le récent ouvrage biographique de Nicolas Buat – conservateur en chef des Archives de Paris – nous invite à le redécouvrir. S’il s’inscrit dans une série déjà relativement longue de travaux consacrés à Law (dont le plus connu est certainement le livre d’Edgar Faure, La Banqueroute de Law, paru en 1977), son grand mérite est de nous plonger dans l’atmosphère bouillonnante de la Régence, sans perdre le lecteur dans de trop pointilleuses descriptions du « Système » mis en place entre 1716 et 1720. -- downloaded pdf to Note
books  reviews  French_language  political_economy  18thC  biography  Law_John  French_government  French_politics  money  monetary_theory  monetary_policy  sovereign_debt  default  Mississippi_Company  bubbles  banking  currency  investors  Regency-France  financial_system  financial_crisis  capital_markets  financial_innovation  downloaded 
october 2015 by dunnettreader
Symposium: The Bailouts of 2007-2009 (Spring 2015) | AEAweb: Journal of Economic Perspectives Vol. 29 No.2
Austan D. Goolsbee and Alan B. Krueger - A Retrospective Look at Rescuing and Restructuring General Motors and Chrysler (pp. 3-24) **--** W. Scott Frame, Andreas Fuster, Joseph Tracy and James Vickery - The Rescue of Fannie Mae and Freddie Mac (pp. 25-52) **--** Charles W. Calomiris and Urooj Khan - An Assessment of TARP Assistance to Financial Institutions (pp. 53-80) **--** Robert McDonald and Anna Paulson - AIG in Hindsight (pp. 81-106) **--** Phillip Swagel - Legal, Political, and Institutional Constraints on the Financial Crisis Policy Response (pp. 107-22) -- available online, didn't download
article  journals-academic  financial_system  Great_Recession  financial_crisis  bailouts  bail-ins  capitalism-systemic_crisis  capital_markets  banking  bank_runs  shadow_banking  NBFI  securitization  credit_booms  credit_ratings  incentives-distortions  public-private_partnerships  Fannie_Mae  housing  leverage  financial_system-government_back-stop  financial_innovation  firesales  liquidity  asset_prices  Fed  lender-of-last-resort  regulatory_capture  regulatory_avoidance  credit_crunch  bankruptcy  government_agencies  government_finance  global_economy  global_governance  international_finance  international_monetary_system  international_crisis  property_rights  derivatives  clearing_&_settlement  GSEs  bubbles 
september 2015 by dunnettreader
R Böhme, N Christin, B Edelman & T Moore - Bitcoin: Economics, Technology, and Governance (2015) | AEAweb: Journal of Economic Perspectives, 29(2): 213-38.
Bitcoin is an online communication protocol that facilitates the use of a virtual currency, including electronic payments. Bitcoin's rules were designed by engineers with no apparent influence from lawyers or regulators. Bitcoin is built on a transaction log that is distributed across a network of participating computers. It includes mechanisms to reward honest participation, to bootstrap acceptance by early adopters, and to guard against concentrations of power. Bitcoin's design allows for irreversible transactions, a prescribed path of money creation over time, and a public transaction history. Anyone can create a Bitcoin account, without charge and without any centralized vetting procedure—or even a requirement to provide a real name. Collectively, these rules yield a system that is understood to be more flexible, more private, and less amenable to regulatory oversight than other forms of payment—though as we discuss, all these benefits face important limits. Bitcoin is of interest to economists as a virtual currency with potential to disrupt existing payment systems and perhaps even monetary systems. This article presents the platform's design principles and properties for a nontechnical audience; reviews its past, present, and future uses; and points out risks and regulatory issues as Bitcoin interacts with the conventional financial system and the real economy. -- downloaded pdf to Note
article  Bitcoin  blockchain  payments_systems  financial_system  financial_regulation  monetary_policy  money  money_supply  asset_prices  financial_innovation  macroeconomic_policy  downloaded 
september 2015 by dunnettreader
Akerlof, G.A. and Shiller, R.J.: Phishing for Phools: The Economics of Manipulation and Deception. (eBook and Hardcover)
Phishing for Phools therefore strikes a radically new direction in economics, based on the intuitive idea that markets both give and take away. Akerlof and Shiller bring this idea to life through dozens of stories that show how phishing affects everyone, in almost every walk of life. We spend our money up to the limit, and then worry about how to pay the next month’s bills. The financial system soars, then crashes. We are attracted, more than we know, by advertising. Our political system is distorted by money. We pay too much for gym memberships, cars, houses, and credit cards. Drug companies ingeniously market pharmaceuticals that do us little good, and sometimes are downright dangerous. Phishing for Phools explores the central role of manipulation and deception in fascinating detail in each of these areas and many more. It thereby explains a paradox: why, at a time when we are better off than ever before in history, all too many of us are leading lives of quiet desperation. At the same time, the book tells stories of individuals who have stood against economic trickery—and how it can be reduced through greater knowledge, reform, and regulation. -- Intro downloaded pdf to Note
financial_crisis  kindle-available  behavioral_economics  competition  downloaded  market_manipulation  markets-psychology  financial_system  pharma  accountability  books  politics-and-money  marketing  information-asymmetric  markets-dependence_on_government  disclosure  markets-failure  financial_innovation  financial_regulation 
august 2015 by dunnettreader
Financial Market Trends - OECD Journal - Home page | OECD
‌The articles in Financial Market Trends focus on trends and prospects in the international and major domestic financial markets and structural issues and developments in financial markets and the financial sector. This includes financial market regulation, bond markets and public debt management, insurance and private pensions, as well as financial statistics. -- links to the contents of each issue of the journal
journal  website  paper  financial_system  global_economy  global_system  financial_regulation  financial_crisis  capital_markets  risk-systemic  international_finance  banking  NBFI  insurance  markets-structure  risk_assessment  risk_management  sovereign_debt  corporate_finance  corporate_governance  institutional_investors  pensions  consumer_protection  equity-corporate  equity_markets  debt  debt-overhang  leverage  capital_flows  capital_adequacy  financial_economics  financial_innovation  financial_system-government_back-stop  bailouts  too-big-to-fail  cross-border  regulation-harmonization  regulation-costs  statistics 
july 2015 by dunnettreader
Sáni Zou, et al -Mainstreaming Climate Change into Financial Governance: Rationale and Entry Points | CIGI June 17, 2015
Sáni Zou, Romain Morel, Thomas Spencer, Ian Cochran, and Michel Colombier -- Fixing Climate Governance Policy Brief No. 5 -- Today, the financial sector is exposed to the physical risks associated with climate change and the impact of climate policies. Securing global financial and economic stability and scaling up low-carbon, climate-resilient investments are not conflicting, but rather mutually reinforcing, objectives. The fifth policy brief in the Fixing Climate Governance series argues that while crucial, classic climate policies do not appear sufficient to address the challenges from climate change that the financial sector is facing. Policies affecting and instruments matching the demand side and supply side of finance need to be aligned with climate objectives to efficiently shift investments toward a low-carbon, climate-resilient economy. Once the link between climate change and the mandates of international financial sector governance and regulatory institutions is understood, the existing tool kits and processes of these institutions — common standards, principles and guidelines with various levels of legal force, country surveillance and technical assistance — present entry points to mainstream climate-related risks and opportunities into their core operations. -- didn't download
paper  green_finance  international_finance  financial_regulation  financial_innovation  risk_assessment  risk_management  climate  investment-socially_responsible  sustainability 
july 2015 by dunnettreader
Arianna Lovera - La finance solidaire: Un marché civique pour le financement du travail | La Vie des idées - 15 janvier 2013
Face au marché capitaliste, il existerait un marché civique, dans le cadre duquel il est possible de financer les projets professionnels ou particuliers selon d’autres critères que celui de la maximisation du profit : c’est l’ambition de la finance solidaire, branche de l’économie solidaire qui permet de financer le travail en prenant en compte des critères extra-économiques ou éthiques. (...) les démarches d’octroi des prêts se fondent donc à la fois sur des critères bancaires traditionnels et sur des critères extra-économiques : parmi les premiers figure notamment l’analyse des bilans et des prévisionnels du sujet demandeur du prêt, dans le but de vérifier qu’il soit en condition de rembourser à la fois le prêt et les intérêts ; tandis que parmi les critères extra-économiques ou « éthiques » entrent des considérations concernant l’activité elle-même et son impact sur le tissu économico-social dans lequel elle s’inscrit. -- didn't download
article  financial_instiutions  financial_system  banking  nonprofit  solidarity  social_entrepreneurs  co-ops  access_to_finance  credit  financial_innovation  finance_capital 
june 2015 by dunnettreader
Georges Gloukoviezoff - Les banques face à leurs clients: Salariés de banque et inclusion bancaire | La Vie des idées - 28 janvier 2013
English translation March 2014 -- http://www.booksandideas.net/When-French-Banks-Encounter-their.html -- Most banks have now abandoned their previous function of providing advice. Instead, they view their services as products designed to maximize profits. They have started invoking the client’s autonomy as a way of passing on the risk of financial exclusion to their customers. In what ways have bank employees reacted to these new circumstances? -- Georges Gloukoviezoff est docteur en économie et spécialiste des questions d’inclusion financière des particuliers. Il est membre de l’Observatoire national de la pauvreté et de l’exclusion sociale. Il a publié en octobre 2010 aux Presses Universitaires de France "L’Exclusion bancaire. Le Lien social à l’épreuve de la rentabilité". Il tient également un blog sur la page d’Alternatives Economiques. -- downloaded French version as pdf to Note
article  France  financial_system  banking  access_to_finance  access_to_services  labor  labor-service_sector  consumer_protection  risk_management  risk_shifting  knowledge_economy  knowledge_workers  financial_innovation  advisory_services  business_practices  business-norms  profit  profit_maximization  financial_regulation  customer_relations  exclusion  exclusion-economic  economic_sociology  poverty  workforce  know-how  services  services-worker_autonomy  managerialism  productivity  incentives-distortions  consumer-know-how  downloaded 
june 2015 by dunnettreader
Charles A.E. Goodhart, Enrico Perotti - Maturity mismatch stretching: Banking has taken a wrong turn | VOX, CEPR’s Policy Portal CEPR - Policy Insight 81 05/06/2015
Banks were not always as mismatched as today.Till the 19th century, bank lending to the private sector was meant to be primarily for short-term, self-liquidating, trade-related working capital, especially in the guise of ‘real bills’, bills of exchange fnancing trade. This was true since the emergence of banks in the 15th century, supporting merchants in their long-distance trade. This approach persisted in the Anglo-American tradition, where banks discounted promissory notes and held the rest of the portfolio in easily saleable securities, especially Consols. This enabled a credible promise to depositors, as banks’ assets were either short-term, or easily sold, with little maturity mismatch. -- And then came Continental universal banking, employed to play catch up -- and then with disintermediation, and the need for banks to find other business, and securitization, and they became hostage to the long-wave boom and bust of real estate -- Land is scarce and its availability is fxed. In other words, real estate value has a large pure rent component. Thus in any expansion, real estate prices generally rise faster than consumer prices, and become prone to bubbles and busts. To avoid socialising risk taking, what is needed is an intermediation process where the fnancing comes from investors that assume the bulk of such risk. We call for solutions that ensure such risk bearing by focusing on two principles: much greater maturity matching and no insured deposit funding. These goals may be achieved by various means. One avenue is to securitise mortgages with little maturity transformation, such as those funded by bond or pension funds. Another is to create new intermediaries providing mortgage loans where the lender shares in the appreciation, while assuming some risk against the occasional bust. This may be seen as a shift towards the principles of Islamic banking, but it is also a return to tradition as in the early days of banking. -- downloaded pdf to Note
economic_history  18thC  19thC  20thC  21stC  banking  banking-universal  intermediation  maturity_transformation  disintermediation  capital_markets  securitization  housing  real_estate  bubbles  mortgages  financial_innovation  financial_crisis  liquidity  institutional_investors  debt-restructuring  debt-overhang  financial_stability  financial_system-government_back-stop  NBFI  downloaded 
may 2015 by dunnettreader
Oren Levintal, Joseph Zeira - Toxic assets in the 18th century | VOX, CEPR’s Policy Portal - 21 September 2009
Problems of regulation appear whenever financial innovations change the ways capital markets operate. This column describes the 18th century emergence of the inconvertible banknote, a "toxic asset” ended by government regulation. The lesson is that free financial markets promote financial innovation, but government must provide adequate regulation keeping the market on track. -- downloaded page as pdf to Note
economic_history  British_history  18thC  financial_innovation  banking  currency  Scotland  free_banking  competition  financial_regulation  financial_crisis  downloaded 
may 2015 by dunnettreader
Thorsten Beck, Ralph De Haas, Steven Ongena - Understanding Emerging Market Banks: A new eBook | VOX, CEPR’s Policy Portal - 06 November 2013
New micro-level data sets allow better testing of existing and new hypotheses on how banks operate in the often challenging environment of emerging markets. This column introduces an eBook that reports on the findings of a recent conference in London on using different research methodologies and data sources in banking research the way towards an exciting research agenda. The papers presented in the conference and summarised in this eBook point *-* First, more detailed micro-level data help researchers and practitioners understand the impact of innovative products, lending techniques, and delivery channels. *-* Second, micro-level data allow a more careful analysis of the impact of specific financial-sector policies on banks and customers. *'* Third, the data opens the important area of how demand- and supply-side constraints on entrepreneurs affect access to external finance. Applying lessons from behavioural economics will be critical in the third point. -- didn't download
etexts  financial_economics  banking  microfinance  emerging_markets  financial_innovation  property_rights  rule_of_law  accounting  methodology-quantitative  methodology-qualitative  SMEs  investment  entrepreneurs  access_to_finance  access_to_services  behavioral_economics 
may 2015 by dunnettreader
Thorsten Beck, Asli Demirgüç-Kunt, Maria Soledad Martinez Peria - Foreign banks and small and medium enterprises: Are they really estranged? | VOX, CEPR’s Policy Portal - 01 April 2010
Small and medium enterprises are engines of economic growth. But what kind of market structure is more conducive to financing these enterprises? This column argues that different types of bank, applying different types of lending technology and organisational structures can all play a vital role in financing them. They're working with a big data set they developed -- shows quite different lending technologies as between foreign and domestic, but similar outcomes in volume of lending, conditions, pricing etc. The big differences are cross couhtry, where thoorer, less developed suffer from less access to credit for investment, higher pricing, etc -- which reflects overall economic conditions and business environment. -- nice use of data -- downloaded page as pdf to Note
financial_system  development  emerging_markets  LDCs  SMEs  access_to_finance  banking  financial_instiutions  cross-border  firms-structure  firms-organization  credit_ratings  financial_sector_development  financial_innovation  investment  collateral  downloaded 
may 2015 by dunnettreader
Economist's View: 'Social Costs of the Financial Sector' - Luigi Zingale lecture and paper - May 2015
Via Tim Taylor, a quotation from Luigi Zingales ("watch video of the lecture or read the talk at his website"): "While there is no doubt that a developed economy needs a sophisticated financial sector, at the current state of knowledge there is no theoretical reason or empirical evidence to support the notion that all the growth of the financial sector in the last forty years has been beneficial to society. In fact, we have both theoretical reasons and empirical evidence to claim that a component has been pure rent seeking. ..." -- downloaded pdf to Note of Zingale paper
financial_system  financial_innovation  financial_sector_development  rent-seeking  financial_regulation  financialization  capital_markets  banking  NBFI  shadow_banking  economic_growth  video  downloaded 
may 2015 by dunnettreader
Andrew W. Lo, Thomas J. Brennan - Do Labyrinthine Legal Limits on Leverage Lessen the Likelihood of Losses?: An Analytical Framework - Texas Law Review, Vol. 90, No. 7, 2012 :: SSRN
Andrew Lo - Massachusetts Institute of Technology (MIT) - Sloan School of Management; Massachusetts Institute of Technology (MIT) - Computer Science and Artificial Intelligence Laboratory (CSAIL); National Bureau of Economic Research (NBER) *--* Thomas J. Brennan - Northwestern University School of Law. **--** A common theme in the regulation of financial institutions and transactions is leverage constraints. Although such constraints are implemented in various ways — from minimum net capital rules to margin requirements to credit limits — the basic motivation is the same: to limit the potential losses of certain counterparties. However, the emergence of dynamic trading strategies, derivative securities, and other financial innovations poses new challenges to these constraints. We propose a simple analytical framework for specifying leverage constraints that addresses this challenge by explicitly linking the likelihood of financial loss to the behavior of the financial entity under supervision and prevailing market conditions. An immediate implication of this framework is that not all leverage is created equal, and any fixed numerical limit can lead to dramatically different loss probabilities over time and across assets and investment styles. This framework can also be used to investigate the macroprudential policy implications of microprudential regulations through the general-equilibrium impact of leverage constraints on market parameters such as volatility and tail probabilities. -- Pages in PDF File: 36 -- Leverage, Liquidity, Financial Regulation, Capital Requirements, Macroprudential Policies, Net Capital Rules -- downloaded pdf to Note
article  SSRN  financial_system  financial_regulation  financial_crisis  markets-structure  banking  NBFI  shadow_banking  leverage  capital_adequacy  liquidity  capital_markets  money_market  derivatives  arbitrage  macroprudential_policies  macroprudential_regulation  risk-systemic  financial_innovation  bank_runs  downloaded 
april 2015 by dunnettreader
Òscar Jordà, Moritz Schularick, and Alan M. Taylor - Mortgaging the Future? | The Big Picture - Guest Post - March 27th, 2015
In the six decades following World War II, bank lending measured as a ratio to GDP has quadrupled in advanced economies. To a great extent, this unprecedented expansion of credit was driven by a dramatic growth in mortgage loans. Lending backed by real estate has allowed households to leverage up and has changed the traditional business of banking in fundamental ways. This “Great Mortgaging” has had a profound influence on the dynamics of business cycles. -- update of their 2012 article that goes back to 19thC and does more breakdown of the changes in the financial services industry -- downloaded page as pdf to Note
US_economy  economic_history  macroeconomics  financial_system  financial_innovation  financial_crisis  housing  mortgages  credit  debt  debt_crisis  business_cycles  financialization  NBFI  real_estate  banking  macroprudential_policies  macroprudential_regulation  macroeconomic_policy  downloaded 
march 2015 by dunnettreader
Gennaioli Shleifer and Vishny - Money Doctors (2015) | Andrei Shleifer
2015. “Money Doctors.” Journal of Finance 70 (1): 91-114.
We present a new model of investors delegating portfolio management to professionals based on trust. Trust in the manager reduces an investor’s perception of the riskiness of a given investment, and allows managers to charge fees. Money managers compete for investor funds by setting fees, but because of trust, fees do not fall to costs. In equilibrium, fees are higher for assets with higher expected return, managers on average under perform the market net of fees, but investors nevertheless prefer to hire managers to investing on their own. When investors hold biased expectations, trust causes managers to pander to investor beliefs. -- downloaded via iPhone to DBOX
investors  risk-mitigation  risk_premiums  risk  liquidity  long-term  article  benchmarks  consumer_demand  institutional_investors  asset_prices  trust  capital_markets  financial_instiutions  risk_management  flight-to-quality  behavioral_economics  investment  management_fees  financial_innovation  downloaded  risk_assessment  asset_management 
march 2015 by dunnettreader
JAMES LIVESEY, Review Essay - BERKELEY, IRELAND AND 18thC INTELLECTUAL HISTORY (Dec 2014) | Modern Intellectual History - Cambridge Journals Online
Department of History, School of Humanities, University of Dundee -- Books reviewed: (1) Marc A. Hight ed., The Correspondence of George Berkeley (Cambridge University Press, 2013), (2) Scott Breuninger , Recovering Bishop Berkeley: Virtue and Society in the Anglo-Irish Context (Palgrave, 2010), (3) Daniel Carey and Christopher J. Finlay , eds., The Empire of Credit: The Financial Revolution and the British Atlantic World, 1688–1815 (Dublin: Irish Academic Press, 2011) -- 18thC Irish intellectual history has enjoyed a revival in recent years. New scholarly resources, such as the Hoppen edition of the papers of the Dublin Philosophical Society and the recently published Berkeley correspondence, have been fundamental to that revival. Since 1986 the journal Eighteenth-Century Ireland: Iris an dá chultúr has sponsored a complex conversation on the meaning and legacy of the 18thC in Irish history. Work in the journal and beyond deploying “New British” and Atlantic histories, as well as continuing attention to Europe, has helped to enrich scholarly understanding of the environments in which Irish people thought and acted. The challenge facing historians of Ireland has been to find categories of analysis that could comprehend religious division and acknowledge the centrality of the confessional state without reducing all Irish experience to sectarian conflict. Clearly the thought of the Irish Catholic community could not be approached without an understanding of the life of the Continental Catholic Church. Archivium Hibernicum has been collecting and publishing the traces of that history for a hundred years and new digital resources such as the Irish in Europe database have extended that work in new directions. The Atlantic and “New British” contexts have been more proximately important for the Protestant intellectual tradition. -- paywall
articles  books  reviews  paywall  intellectual_history  18thC  Ireland  Protestants-Ireland  Catholics-Ireland  Berkeley  Anglo-Irish_constitution  British_politics  reform-social  reformation_of_manners  virtue_ethics  civic_virtue  Protestant_Ascendancy  Whigs-oligarchy  Church_of_England  Church_of_Ireland  patronage  networks-political  networks-social  networks-information  fiscal-military_state  public_finance  taxes  credit  financial_innovation  financial_sector_development  economic_history  political_economy  politics-and-religion  politics-and-money 
february 2015 by dunnettreader
Special Issue: Microfinance -- AEAweb: American Economic Journal: Applied Economics Vol. 7 No.1, Jan 2015
Abstract of introductory article -- Causal evidence on microcredit impacts informs theory, practice, and debates about its effectiveness as a development tool. The six randomized evaluations in this volume use a variety of sampling, data collection, experimental design, and econometric strategies to identify causal effects of expanded access to microcredit on borrowers and/or communities. These methods are deployed across an impressive range of locations—six countries on four continents, urban and rural areas—borrower characteristics, loan characteristics, and lender characteristics. Summarizing and interpreting results across studies, we note a consistent pattern of modestly positive, but not transformative, effects. We also discuss directions for future research. -- broad conclusion to be expected contra the hype -- but focus still seems to be on *credit* (with assumptions re micro and SME entrepreneurs and business formation) rather than access to services -- also question whether the former Yugoslavia study really dealt with "micro", likely the sort of labeling of SMEs as micro like Aftab's programs
journals-academic  article  paywall  microfinance  access_to_finance  development  economic_growth  economic_sociology  development-impact  RCT  econometrics  causation  causation-social  financial_sector_development  financial_economics  financial_access  institutional_economics  banking  credit  financial_innovation  SMEs  access_to_services  EF-add 
january 2015 by dunnettreader
Secured Transactions Reform in the Anericas | Institute of the Americas
Diwnloaded to iPhone report of conference co-sponsored by Institute of the Americas and IFC in 2013 -- url is for general page dealing with STR program -- Secured Transactions Reform in Latin America and the Caribbean 2013 - What is one of the single largest barriers to growth for SMEs in the developing world? The lack of access to finance at reasonable rates in the formal banking market. Access to credit promotes productive capacity, competitiveness, job creation and ultimately poverty alleviation
website  paper  downloaded  financial_innovation  access_to_finance  financial_sector_development  Latin_America  SMEs  securitization  banking  legal_system  reform-legal  credit  collateral 
january 2015 by dunnettreader
Kose, Prasad, Rogoff & Wei (2009) - Financial Globalization: A Reappraisal
downloaded to iPhone - see also papers citing this - The literature on the benefits and costs of financial globalization for developing countries has exploded in recent years, but along many disparate channels with a variety of apparently conflicting results. There is still little robust evidence of the growth benefits of broad capital account liberalization, but a number of recent papers in the finance literature report that equity market liberalizations do significantly boost growth. Similarly, evidence based on microeconomic (firm- or industry-level) data shows some benefits of financial integration and the distortionary effects of capital controls, but the macroeconomic evidence remains inconclusive. At the same time, some studies argue that financial globalization enhances macroeconomic stability in developing countries, but others argue the opposite. This paper attempts to provide a unified conceptual framework for organizing this vast and growing literature, particularly emphasizing recent approaches to measuring the catalytic and indirect benefits to financial globalization. Indeed, it argues that the indirect effects of financial globalization on financial sector development, institutions, governance, and macroeconomic stability are likely to be far more important than any direct impact via capital accumulation or portfolio diversification. This perspective explains the failure of research based on cross-country growth regressions to find the expected positive effects of financial globalization and points to newer approaches that are potentially more useful and convincing.
credit  financial_innovation  spreads  financial_crisis  contagion  investment  financial_sector_development  interest_rates  FDI  emerging_markets  download  bubbles  FX  capital_flows  monetary_policy  fiscal_policy  financial_system  IMF  banking  NBFI  business_cycles  sovereign_debt  global_economy  macroeconomics  globalization 
january 2015 by dunnettreader
Financial Innovation and Risk Management
At a time when the recent crisis has given financial innovation a bad name, Shiller’s contrarian message is that well-designed financial instruments and markets are an enormous boon to social welfare. We agree.
financial_innovation  risk  insurance 
december 2014 by dunnettreader
Jocelyn Pixley, G.C. Harcourt eds. - Financial crises and the nature of capitalist money: Mutual developments from the work of Geoffrey Ingham (2013) | Palgrave Macmillan
This volume is a debate about a sociology and economics of money: a form of positive trespassing (..) written by scholars of both disciplines (..) starting from the original groundwork laid by Geoffrey Ingham. The contributors look critically at money's institutions and the meanings and history of money-creation and show the cross cutting purposes or incommensurable sides of money and its crises. (...) since money is a promise, understanding this social relation must be a joint though plural task between economics and sociology at the very least. **--** Preface; R. Swedeberg *-* 1. Introduction to Positive Trespassing'; J. F. Pixley and G. C. Harcourt *-* 2. Requirements of a Philosophy of Money and Finance; J. Smithin *-* 3. Ingham and Keynes on the Nature of Money; M. Hayes *-* 4. Money: Instrument of Exchange or Social Institution of Value? A. Orlean and C. Goodhart *-* 5. A New Meme for Money, R. Wray *-* 6. Monetary Surrogates and Money's Dual Nature; D. Woodruff *-* 7. Reforming Money to Exit the Crisis: Examples of Non-capitalist Monetary Systems in Theory and Practice; L. Fantacci *-* 8. The Current Banking Crisis in the UK: an Evolutionary View; V. Chick *-* 9. Money and the State; M. Sawyer *-* 10. The Real (Social) Experience of Monetary Policy; S. Dow *-* 11. Economic Policies of the New Consensus Macroeconomics: A Critical Appraisal; P. Arestis *-* 12. A Socio-economic Systems Model of the 2007+ Global Financial Crisis; T.R. Burns, A. Martinelli and P. Deville *-* 13. Credit Money, Fiat Money and Currency Pyramids: Critical Reflections on the Financial Crisis and Sovereign Debt, B. Jessop *-* 14. Geoffrey Ingham's Theory, Money's Conflicts and Social Change; J. Pixley *-* 15. Reflections on the Two Disciplines' Mutual Work; G. Ingham
books  social_theory  economic_theory  social_sciences  disciplines  money  economic_sociology  economic_culture  macroeconomics  financial_economics  financial_system  banking  financial_crisis  sovereign_debt  monetary_theory  money-Cartelist  money_supply  monetarism  monetary_policy  central_banks  financial_innovation 
november 2014 by dunnettreader
Mark Elliott Budnitz - The Development of Consumer Protection Law, the Institutionalization of Consumerism, and Future Prospects and Perils (2010) :: SSRN
Georgia State University College of Law -- Georgia State University Law Review, Vol. 26, No. 4, p. 1147, 2010 -- The article examines major developments in the statutes, regulations and Supreme Court cases that have regulated consumer financial services since 1969. Major victories and defeats in the battle for laws protecting consumers are described. Consumer protection law is analyzed within the context of consumerism and its role as a movement for social change and law reform. The article describes the development of a permanent organizational structure for engaging in consumer law reform. This development has resulted in the institutionalization of consumerism and its values have become embedded in society’s values, better ensuring its survival. Finally, the article explores the prospects of the continued development of strong consumer protection law and the perils it faces in the future. -- Number of Pages in PDF File: 64 - Keywords: consumer protection, consumers, financial services, consumer protection law, consumerism, social change, reform, consumer law, legal history. -- didn't download
article  SSRN  US_legal_system  political_culture  legal_history  20thC  21stC  business-norms  business-and-politics  consumer_protection  consumerism  financial_system  financial_access  financial_regulation  reform-legal  reform-finance  SCOTUS  financial_innovation  EF-add 
november 2014 by dunnettreader
Bank of England | Financial Stability | Bank of England/ECB securitisation discussion paper and responses
Bank of England/ECB securitisation discussion paper and responses -- On the 30 May 2014, the Bank of England and the European Central Bank (ECB) published a discussion paper (see Key Resources) that explained the case for a better functioning securitisation market in the European Union and outlined a range of options that authorities could support to revitalise the market. A broad range of market participants and stakeholders responded to the discussion paper. These responses have been synthesised into a short note, and full responses are published where we have received permission to do so. -- didn't download pdfs
report  capital_markets  securitization  markets-structure  financial_innovation  financial_regulation  financial_sector_development  central_banks  EF-add 
november 2014 by dunnettreader
Lapavitsas, Costas - Banks and the Design of the Financial System: Underpinnings in Steuart, Smith and Hilferding (2002) - SOAS Research Online (School of Oriental and African Studies)
Banks in bank-based financial systems tend to engage in long-term lending that requires substantial own capital to guarantee solvency. In market-based systems, in contrast, they tend to undertake short-term lending that requires adequate reserves to guarantee liquidity. Theoretical support for these two approaches to banking can be found in, respectively, Steuart and Smith. The innovative Marxist analysis of banking by Hilferding combined elements of both. Banks in the early stages of development are Smith-like but, as the scale of fixed investment in industry grows, they lend long-term and become Steuart-like, also developing ‘commitment’ relations with enterprises. However, Hilferding also implied, erroneously, that financial systems historically evolve in a bank-based direction. Based on Hilferding but also drawing on Japanese Marxist analysis of finance, it is suggested instead that bank behaviour in bank-based systems results from institutional changes imposed by policy-makers in order to achieve ‘catching up.’ -- Item Type: Monographs (Working Paper) -- Keywords: Adam Smith, James Steuart, Rudolf Hilferding, banking theory, Marxist theory of finance -- SOAS Departments & Centres: Faculty of Law and Social Sciences > Department of Economics -- downloaded pdf to Note
paper  intellectual_history  economic_history  18thC  19thC  20thC  21stC  financial_system  finance_capital  banking  financial_economics  Marxist  leverage  credit  money_market  industrialization  investment  liquidity  financial_crisis  capital_adequacy  financial_sector_development  financial_innovation  Smith  Steuart_James  Hilferding  downloaded  EF-add 
october 2014 by dunnettreader
Sunanda Sen - The Meltdown of the Global Economy: A Keynes-Minsky Episode? - Working Paper No. 623 | Levy Economics Institute | September 2010
The paper begins with some theoretical concerns relating to factors that could trigger a crisis similar to the global economic crisis that began in 2008. The first concern relates to the deregulated financial institutions and the growing uncertainty that can be witnessed in these liberalized financial markets. The second relates to financial engineering with innovations in these markets, simultaneously providing cushions against risks while generating flows of liquidity that remain beyond the conventional sources of bank credit. Interpreting the role of uncertainty, one can observe the connections between investment and finance, both of which are subject to changes in the state of expectations. The initial formulation can be traced back to Keynes’s General Theory, where liquidity preference is linked to asset prices and new investments. The Keynesian analysis was reformulated in 1986 by Minsky, who introduced the possibility of sourcing external finance through debt, which further adds to the impact of uncertainty. Minsky’s characterization of deregulated financial markets considers the newfangled sources of nonbank credit, especially with the involvement of banks in the securities market under the universal banking model. As for the institutional arrangements that provide for profits on transactions, financial assets bought and sold in the primary market as initial public offerings of stocks are usually transacted later, in the secondary market, where these are no longer backed by physical assets.In the upswing, finance creates a myriad of financial claims and liabilities, and thus becomes increasingly remote from the real economy, while innovations to hedge and insulate assets continue to proliferate in the financial market, especially in the presence of uncertainty. The paper looks especially at the US. This is appended by a stylized account of the turn of events in terms of a theoretical model that highlights the role of uncertainty in the process. -- Associated Program: Monetary Policy and Financial Structure -- downloaded pdf to Note
paper  economic_theory  financial_crisis  bubbles  Great_Recession  financial_system  finance_capital  financialization  financial_innovation  banking  financial_regulation  derivatives  risk  risk-systemic  uncertainty  expectations  capital_markets  NBFI  intermediation  speculative_finance  securitization  Glass-Steagal  investment  investors  asset_management  real_economy  real_estate  Keynes  liquidity  Minsky  credit  debt  deleverage  leverage  asset_prices  banking-universal  disintermediation  money_market  Ponzi_finance  IPOs  secondary_markets  fragility  resilience  downloaded  EF-add 
october 2014 by dunnettreader
Cassandra Does Tokyo: Sympathy For The Devil -July 2014
Brilliantly horrifying mock CV of a senior executive moving through all the financial ibdustry's greatest "hits" of the past quarter century, starting with Citibank generating loan deals in the NICs to recycle pétrodollars, through Drexel stuffing LBO junk bonds in related fiduciaries, Long Term Capital, dot com bubble, commodity "swaps" as low risk uncorrelated asset class, of course mortgage securitization, HFT "liquidity provision" via order sniffing, front running, dark pools, selective "market making", and designing equity portfolio insurance for post crash terrified institutional investors (who would lose the entire upside of past 5 years stock prices, plus a few ywists, especially from the '90s involving derivatives, the Nikkei, etc that were off my radar screen. Only thing I think he left out were the various municipal finance scams.
20thC  post-Cold_War  21stC  economic_history  financialization  Great_Recession  financial_innovation  bubbles  busisness-ethics  institutional_investors  derivatives  securitization  HFT  emerging_markets  fraud  fiduciaries  financial_regulation  finance_capital 
september 2014 by dunnettreader
Claire Célérier, Adrien Matray - Unbanked households: Evidence of supply-side factors | vox 23 September 2014
There is an urgent need to understand why many households in the US do not hold a bank account. This column argues that supply-side factors – standard bank practices that ration certain households – play a role in this. The evidence comes from the staggered interstate branching deregulation after 1994 that provides an exogenous shock on bank competition. Further findings suggest that access to bank accounts improves access to credit without translating into higher ratios of debt to income. -- increased competition made a substantial difference in reducing unbanked, especially of blacks that the cozy locals seem not to have seen as prospective customers
article  economic_history  20thC  21stC  US_economy  banking  competition-financial_sector  financial_sector_development  financial_innovation  financial_access 
september 2014 by dunnettreader
the UNEP Inquiry into the Design of a Sustainable Financial System | UNEP - Green Economy Initiative
C About

Mobilizing the world’s capital is essential for the transition to a sustainable, low-carbon economy. Today, however, too little capital is supporting the transition, and too much continues to be invested in a high-carbon and resource-intensive, polluting economy. Market participants and others recognize that prevailing rules and incentives governing financial markets can disadvantage long-term, sustainable behavior. Long-term environmental risks are not being effectively counted and green opportunities are inadequately valued. Such distortions can lead to a misallocation of capital and a danger of systemic risks to the economy and the natural environment. The UNEP Inquiry is intended to support such actions by identifying best practice, and exploring financial market policy and regulatory innovations that would support the development of a green financial system. Building on the twin pillars of UNEP’s strong track record through its Green Economy initiative and the UNEP-Finance Initiative, it will assemble the world`s best practice and forward-looking expert knowledge through an advisory council, practitioner dialogue and research. The Inquiry will produce a final options report as well as technical papers throughout its 18-24 month life from January 2014. The Inquiry`s current set up phase will ensure it is designed with guidance from practitioners and experts, and establish a network of world-class advisors and researchers. Engaging with existing initiatives will ensure that it can effectively convene and catalyze broad debate that supports the crystallization of options for advancing a more systematic approach to developing a green financial system. -- summary downloaded pdf to Note
UN  UNEP  green_economy  green_finance  financial_system  international_political_economy  global_governance  financial_regulation  financial_sector_development  financial_innovation  banking  capital_markets  incentives  investment  investors  corporate_finance  public_finance  sustainability  civil_society  risk  insurance  intermediation  downloaded  EF-add 
september 2014 by dunnettreader
Green Bond Principles 2014: Voluntary Process Guidelines for Issuing Green Bonds — Ceres
Green Bonds enable capital-raising and investment for new and existing projects with environmental benefits. Recent activity indicates that the market for Green Bonds is developing rapidly. The Green Bond Principles (GBP) are voluntary process guidelines that recommend transparency and disclosure and promote integrity in the development of the Green Bond market by clarifying the approach for issuance of a Green Bond. The GBP are intended for broad use by the market: they provide issuers guidance on the key components involved in launching a credible Green Bond; they aid investors by ensuring availability of information necessary to evaluate the environmental impact of their Green Bond investments; and they assist underwriters by moving the market towards standard disclosures which will facilitate transactions. -- downloaded pdf to Note
green_economy  green_finance  reform-economic  reform-finance  climate  capital_markets  investors  environment  disclosure  financial_innovation  standards-sustainability  downloaded  EF-add 
september 2014 by dunnettreader
Network for Sustainable Financial Markets | Home
The Network for Sustainable Financial Markets is an International, non-partisan network of finance sector professionals, academics and others who have an active interest in long-term investing. We believe that the recurring crises recently experienced in our financial markets are not isolated incidents. Rather, this instability is evidence that the financial market system is in need of well thought-out reform so that it can better serve its core purpose of creating long-term sustainable value. Our primary concern today is not that reform efforts will result in the adoption of too much or too little regulation. Rather, we see the greatest peril as inappropriate regulation and governance reforms that fail to address the real causes of financial market instability. While increased transparency, better risk management, additional liquidity and other surface fixes might address the current symptoms, they are not enough to resolve underlying systemic problems. Delay will only make things worse since failure to deal with these deep-rooted design flaws can only mean repetitive, deepening crises with growing economic and social destabilisation. The time to act is now. The Network’s goal is to foster interdisciplinary collaboration on research and advocacy projects between market professionals, academics and other opinion-leaders. We seek to fill the gaps between existing initiatives, to engage on problems which have received attention but have not still been solved and also to involve many more opinion-shapers than has previously been the case. We also intend that the Network be time-limited – our ultimate goal is to embed the Network’s guiding principles into the approaches used by other entities involved in research and public policy, then dissolve. -- connected to Climate Bond Initiative
website  financial_system  financial_crisis  financial_regulation  financial_innovation  financial_sector_development  reform-finance  green_finance  investors  corporate_governance  corporate_finance  capital_markets  banking  international_finance  international_monetary_system  risk-systemic  standards-sustainability  disclosure  accounting 
september 2014 by dunnettreader
Sean Kidney - World Bank does a 10yr, AAA $12.06m green retail bond especially for Merrill Lynch Wealth Management clients. Harbinger? | Climate Bonds Initiative - Sep 2, 2014
A new green retail bond (link is external) has been issued by the World Bank in conjunction (link is external)Merrill Lynch Wealth Management (link is external). The bond has 10 year tenor, coupon of 2.32% for the first 5 years which gradually increases to a maximum of 8.82% and is callable after the first year. A very interesting approach, presumably carefully worked out with Merrill Lynch. The World Bank green bond program's credentials are verified by CICERO (link is external). One characteristic that some financial media coverage has been highlighting is that this was the first green bond issued that has a "callable (link is external)" structure. The World Bank does like to try things out in the retail space: in 2011 they issued some retail green bonds through the BoAML network, paying a fixed coupon for the first year that switched to a floating coupon after one year (but weren't callable). Earlier this year they issued another structured bond through BNP Paribas. That bond was linked to an equity index (link is external). All part of working out what will fly in the retail space, so others can then pick and run with successful formats.
financial_innovation  financial_sector_development  capital_markets  World_Bank  investors  sustainability  green_economy  green_finance  reform-economic  reform-finance  climate  links 
september 2014 by dunnettreader
Future shape of banking - Time for reformation of banking and banks? (report) | PwC - 2014
Given the current economic climate, in particular the focus on the European Central Banks Comprehensive Assessment and the move to the Single Supervisory Mechanism, a working group from the PwC Response to the economic crisis in Europe (REcCE) network has developed a provocative point of view paper on the future shape and nature of banking services and of “banks” themselves. Future shape of banking outlines four key areas banks need to address in order to remain relevant, as we argue that the future of banking will look very different to what we see today and that while the need for banking services remains – traditional banks need to sharpen their strategic focus and regulators and regulation will also need to adapt.... adding up to a paradigm shift in the banking landscape. -- downloaded pdf to Note
international_political_economy  international_finance  international_monetary_system  banking  financial_regulation  financial_innovation  disintermediation  payments_systems  central_banks  tech  NBFI  liquidity  leverage  investors  downloaded  EF-add 
september 2014 by dunnettreader
Rajiv Sethi: The Economics of Hyman Minsky - Dec 2012
There has been a resurgence of interest in the economic writings of Hyman Minsky over the past few years, and for good reason. I find this immensely gratifying. I first came across his work as a graduate student, and remember being struck by the manner in which he was able to weave together sweeping macroeconomic hypotheses with rich institutional and historical detail. -- excerpts by Rajiv from an edited book in honor of Minsky and a 1992 paper - the 2nd dealing with Financial Instability Hypothesis (Minsky and Kindleberger) and whether it violates Rational Expectations - Rajiv distinguishes between rationality of decisions vs remaining on Rational Expectations equilibrium trajectory - he doesn't discuss, but partly depends on what "rational" is (what goals are presumed toward which "rational" decisions are made re actions) and the various levels of decision makers (what's rational for loan officer not necessarily for bank) - also mentions follow-the-leader but doesn't develop problem that most financial innovations take advantage of anomalies, and excess profits aren't going to be available to followers, but the shift into innovation likely adds unrecognized risk (or inadequate profit to cover risk) to system structure
financial_economics  business_cycles  financial_crisis  financial_system  financial_innovation  rational_expectations  Minsky  Kindleberger  Pocket 
july 2014 by dunnettreader
Danielle Keats Citron and Frank A. Pasquale - "The Scored Society: Due Process for Automated Predictions" | 89 Washington Law Review 1 (2014)
Both at University of Maryland Francis King Carey School of Law -- Keywords - Big Data, predictions, artificial intelligence -- Big Data is increasingly mined to rank and rate individuals. Predictive algorithms assess whether we are good credit risks, desirable employees, reliable tenants, valuable customers—or deadbeats, shirkers, menaces, and “wastes of time.” Crucial opportunities are on the line, including the ability to obtain loans, work, housing, and insurance. Though automated scoring is pervasive and consequential, it is also opaque and lacking oversight. In one area where regulation does prevail—credit—the law focuses on credit history, not the derivation of scores from data. Procedural regularity is essential for those stigmatized by “artificially intelligent” scoring systems. The American due process tradition should inform basic safeguards. Regulators should be able to test scoring systems to ensure their fairness and accuracy. Individuals should be granted meaningful opportunities to challenge adverse decisions based on scores miscategorizing them. Without such protections in place, systems could launder biased and arbitrary data into powerfully stigmatizing scores. -- downloaded pdf to Note
article  legal_theory  US_constitution  civil_liberties  due_process  big_data  financial_innovation  privacy  reputation  inequality  financial_regulation  algorithms  downloaded  EF-add 
july 2014 by dunnettreader
Claire Judde de Larivière - The 'Public' and the 'Private' in 16thC Venice: From Medieval Economy to Early Modern State | JSTOR: Historical Social Research / Historische Sozialforschung, Vol. 37, No. 4 (142) (2012), pp. 76-94
This article analyses the Venetian public galleys' expeditions during the sixteenth century, as a case study for understanding the relationships between patricians and the State, and the way in which the 'public' and the 'private' roles were reorganized in the late Middle Ages. Going further the explanations usually given, the article tries to explain the decline of the public galleys, and emphasizes the symbolic, cultural, political and ideological factors that had also led to the abandonment of public navigation. It seeks to reintegrate economic considerations, practices, actions and actors into their social, political and ideological contexts, and thus avoids isolating economic phenomena and economic thinking from their political background. Doing so, it argues that the abandonment of public navigation in Venice was the corollary of the gradual differentiation between the State and the ruling class that was typical of the earliest stages of modernity. -- interesting bibliography ranging from Frederic Lane to Craig Muldrew -- downloaded pdf to Note
article  jstor  economic_history  16thC  Venice  shipping  public_goods  public_enterprise  private_enterprise  elites  stratification  privatization  capitalism  imperialism  political_culture  economic_culture  elite_culture  political_economy  Renaissance  modernity-emergence  social_order  public_finance  financial_economics  financial_innovation  common_good  republicanism  republics-Ancient_v_Modern  mercantilism  empire-and_business  downloaded  EF-add 
june 2014 by dunnettreader
Tom Jones - Pope's "Epistle to Bathurst" and the Meaning of Finance | JSTOR: Studies in English Literature, 1500-1900, Vol. 44, No. 3 (Summer, 2004), pp. 487-504
This article attempts to show that Alexander Pope's argument and poetic technique in the Epistle to Bathurst challenge the idea that words are like money or other economic tokens. Reading against the recent characterization of Pope's work as nostalgic, this piece takes issue with the corollary established by J. G. A. Pocock and others between financial change and linguistic uncertainty in the early eighteenth century. It presents Pope as a skeptical thinker aware of the radical contingency of all human values, more in line with David Hume than earlier writers on money. It suggests that Pope's imitative meter is an investigation of this contingency of value. -- Yeah ! -- downloaded pdf to Note
article  jstor  18thC  English_lit  Pope  political_economy  moral_economy  finance_capital  financial_innovation  language  semiotics  values  historical_change  scepticism  contingency  morality-conventional  social_order  Pocock  commerce  downloaded  EF-add 
may 2014 by dunnettreader
Justin Yifu Lin and Kevin Lu - To attract private investment, infrastructure must be a new asset class. - Project Syndicate
....abandoning the view that infrastructure assets fit into the paradigm of traditional asset classes like equity, debt, or real estate. Infrastructure must be redefined as a new asset class, based on several considerations. For starters, there is the public-good element of many infrastructure projects, which demands contingent government obligations like universal coverage levels for basic services. In order to make such projects more appealing to private investors, economic externalities should be internalized, and a link should be established between the internal rate of return, which matters to a commercial investor, and the economic rate of return, which matters to society. Moreover, innovative mechanisms to supply new assets to investors would be needed – and that requires the creativity found and priced by markets. --The new asset class would need its own standardized risk/return profile, accounting, for example, for the political risks that public-sector involvement may imply and for the lower returns from infrastructure relative to traditional private equity. Moreover, the risks associated with the new asset class would change as projects progress from feasibility study to construction to operation, implying that each phase would attract different sources of funding. -- Another important consideration is the considerable technical expertise that infrastructure investments demand, which makes them more complex than most assets. Similarly, a specialized network of actors would be needed to ensure that intermediation of infrastructure transactions is efficient and cost-effective, instead of fragmented and slow, as it is now.
emerging_markets  international_political_economy  international_finance  capital_markets  infrastructure  investment  financial_innovation 
may 2014 by dunnettreader
Nauro F Campos, Stefan Dercon - The finance and growth nexus in low-income countries | vox March 2014
Financial development and growth have long been linked. This column argues that there remain fundamental lacunae in our understanding of the finance-growth nexus. Three main areas for future research are identified: aid, institutions and technology. DFID linked paper -- Five recent findings are worth mentioning. One is that the long-run effect of finance on growth is indeed positive and dominates the short-term effect that tends to be negative. This was first uncovered on a cross-country setting by Kaminsky and Schmukler (2003) and Loayza and Ranciere (2006) (see Campos et al. 2012 for within-country evidence.) The second is that the relationship may be non-linear. Beyond a certain threshold (calculated to be above 100% of GDP) finance is associated with negative growth (Berkes et al. 2012). A noteworthy third finding refers to distribution. Who gets credit matters. Household credit seems to have little growth payoffs, while private sector credit has large growth payoffs (see Beck, 2013, and references therein). Fourth, financial development reduces income inequality and exerts a disproportionally positive impact on the bottom quintile. One may think finance is pro-growth and pro-rich but evidence only supports the former (Beck et al. 2007). Fifth and finally, different financial liberalisation policies have contrasting effects on income inequality. For instance, Delis et al. (forthcoming) reports that capital stringency and supervisory power regulation lower inequality, while market discipline and activity restrictions may exacerbate it.
financial_sector_development  emerging_markets  capital_markets  banking  microfinance  capital_flows  financial_regulation  financial_system  financialization  financial_innovation  EF-add 
march 2014 by dunnettreader
Howard Davies - The Banks that Ate the Economy - Project Syndicate Feb 2014
Links to 3 papers downloaded to Note -- Bank of England Governor Mark Carney surprised his audience at a conference late last year by speculating that banking assets in London could grow to more than nine times Britain’s GDP by 2050. His forecast represented a simple extrapolation of two trends: continued financial deepening worldwide (that is, faster growth of financial assets than of the real economy), and London’s maintenance of its share of the global financial business.
These may be reasonable assumptions, but the estimate was deeply unsettling to many. Hosting a huge financial center, with outsize domestic banks, can be costly to taxpayers. In Iceland and Ireland, banks outgrew their governments’ ability to support them when needed. The result was disastrous.
paper  economic_growth  financialization  financial_innovation  financial_sector_development  financial_system  financial_regulation  financial_crisis  finance_capital  bubbles  productivity  downloaded  EF-add 
february 2014 by dunnettreader
Matt Levine - Financial Innovation Is Depressing - Bloomberg Nov 2013
Riffing off a Dealbook special section on Wall Street innovation -- There are basically three categories of financial innovation here:
Cut costs by providing less and worse service.
Better marketing of old, possibly unpleasant things.
Clever new fraud.

Followed by a roundup of what's passed for innovation and the destruction wrought over the past few decades.
financial_innovation  capital_markets  banking  investment  financial_crisis  financialization  fraud  EF-add 
november 2013 by dunnettreader
Valuing Private Equity - Morten Sorensen, Neng Wang, Jinqiang Yang | NBER Nov 2013
NBER Working Paper No. 19612
Issued in November 2013 -- downloaded pdf to Note

We investigate whether the performance of Private Equity (PE) investments is sufficient to compensate investors (LPs) for risk, long-term illiquidity, management and incentive fees charged by the general partner (GP). We analyze the LP's portfolio-choice problem and find that management fees, carried interest and illiquidity are costly, and GPs must generate substantial alpha to compensate LPs for bearing these costs. Debt is cheap and reduces these costs, potentially explaining the high leverage of buyout transactions. Conventional interpretations of PE performance measures appear optimistic. On average, LPs may just break even, net of management fees, carry, risk, and costs of illiquidity.
financial_system  financial_innovation  finance_capital  investment  risk  profit  equity  Innovation  corporate_finance  leverage  downloaded  EF-add 
november 2013 by dunnettreader
Timothy C. Johnson - Reciprocity as the Foundation of Financial Economics | SSRN - Oct 2013
This paper argues that the fundamental principle of contemporary financial economics is balanced reciprocity, not the principle of utility maximisation that is important in economics more generally. The argument is developed by analysing the mathematical Fundamental Theory of Asset Pricing with reference to the emergence of mathematical probability in the seventeenth century in the context of the ethical assessment of commercial contracts. This analysis is undertaken within a framework of Pragmatic philosophy and Virtue Ethics. The purpose of the paper is to mitigate future financial crises by reorienting financial economics to emphasise the objectives of market stability and social cohesion rather than individual utility maximisation. -- Downloaded pdf to Note
paper  SSRN  economic_history  legal_history  economic_theory  Aristotle  Aquinas  Papacy  medieval_history  Renaissance  16thC  17thC  18thC  moral_philosophy  moral_economy  financial_innovation  probability  mathematics  commerce  risk  interest_rates  prices  pragmatism  virtue_ethics  downloaded  EF-add 
november 2013 by dunnettreader
Tim Johnson - Magic, maths and money: The Dark Side of Mathematics - Nov 2013
Fsscinating discussion starting with debate re morality of default and obligations re knowing the borrower on lender side - Last half discusses growth of insurance in 19thC US -- Essential to the process of banking is the question "how will you repay the loan": the lender must understand the borrower. I would argue that without asking this question the lender cannot establish the competence of the borrower to enter into the loan contract, and so if the lender has not endeavoured to establish this competence, the loan is void. The question relevant to US policy is how were sub-prime borrowers going to repay the loan and interest? I would argue that it is usurious (i.e. illicit) to see these sub-prime borrowers as profit opportunities if you do not genuinely believe they can re-pay the loan.

I am particularly interested in this idea of enticing people into contracts in order to make profits having just read Jonathan Levy's Freaks of Fortune, a hard to read but fascinating account of the role of life insurance in nineteenth century US society.
economic_history  US_history  19thC  financial_innovation  financial_sector_development  financial_regulation  political_economy  moral_economy  EF-add 
november 2013 by dunnettreader
James Narron and David Skeie - Crisis Chronicles: The South Sea Bubble of 1720—Repackaging Debt and the Current Reach for Yield - Liberty Street Economics
As we’ll see in upcoming posts, financial innovation—in this case the repackaging of debt—is a recurring theme in our review of historic crises. In this case, the South Sea Company structured the national debt in a way that was initially attractive to investors, but the scheme to finance the debt-for-equity swap ultimately proved to be noncredible and the market collapsed. Now fast-forward to 2013 and the five-year anniversary in September of Lehman Brothers’ failure. As Fed Governor Jeremy Stein pointed out in a recent speech, a combination of factors such as financial innovation, regulation, and a change in the economic environment, can sometimes contribute to an overheating of credit markets. Asset-backed securitization and collateralized debt obligations have returned with a bang—or perhaps a boom—and are on pace to exceed pre-crisis levels, perhaps fueled by investors’ reach for yield.
economic_history  18thC  Britain  South_Sea_Crisis  bubbles  financial_crisis  financial_innovation  EF-add 
november 2013 by dunnettreader
Financial Innovation: The Bright and the Dark Sides by Thorsten Beck, Tao Chen, Chen Lin, Frank M. Song :: SSRN October 2012
Beck, Thorsten and Chen, Tao and Lin, Chen and Song, Frank M., Financial Innovation: The Bright and the Dark Sides (January 25, 2012). Available at SSRN: http://ssrn.com/abstract=1991216 or http://dx.doi.org/10.2139/ssrn.1991216 -- Date posted: January 25, 2012 ; Last revised: October 7, 2012 -- downloaded pdf to Note -- The financial turmoil from 2007 onwards has spurred renewed debates on the “bright” and “dark” sides of financial innovation. Using bank-, industry- and country-level data for 32, mostly high-income, countries between 1996 and 2006, this paper is the first to explicitly assess the relationship between financial innovation in the banking sector and (i) real sector growth, (ii) real sector volatility, and (iii) bank fragility. We find evidence for both bright and dark sides of financial innovation. On the one hand, we find that a higher level of financial innovation is associated with a stronger relationship between a country’s growth opportunities and capital and GDP per capita growth and with higher growth rates in industries that rely more on external financing and depend more on innovation. On the other hand, we find that financial innovation is associated with higher growth volatility among industries more dependent on external financing and on innovation and with higher idiosyncratic bank fragility, higher bank profit volatility and higher bank losses during the recent crisis.

Number of Pages in PDF File: 69

Keywords: Financial Innovation, Financial R&D Intensity, Bank Risk Taking, Financial Crisis, Industrial Growth, Finance and Growth
paper  SSRN  financial_system  financial_innovation  economic_growth  development  risk  banking  capital_markets  financial_regulation  financial_crisis  financialization  Innovation  industry  corporate_finance  downloaded  EF-add 
september 2013 by dunnettreader

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