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Financial Markets and Innovations. Cory Donehew ECO6226-0001 Seminar in Money and Banking. Objectives. Functions Motivations Impacts on society Regression Analysis. Functions. Risk reduction Information gathering Monitoring managers Savings mobilization Facilitating exchange.
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Financial Markets and Innovations Cory Donehew ECO6226-0001 Seminar in Money and Banking
Objectives • Functions • Motivations • Impacts on society • Regression Analysis
Functions • Risk reduction • Information gathering • Monitoring managers • Savings mobilization • Facilitating exchange
Motivations • Completing “incomplete” markets • Eliminating information asymmetries • Minimizing transaction, searching and marketing costs • Circumventing taxes and regulation • Globalization • Technological breakthroughs
Impacts on Society • Negative arguments: • Encourages increased risk taking • Loss of tax revenues • Linking of economies • Positive arguments: • Sharing of risk • Reduced uncertainty • Increased tax revenues through growth