Does Financial Innovation of Credit Derivatives Make Bank Riskier?
This paper brings some theoretical evidence from financial innovation and their impact in the credit market. Normally, financial innovations tend to reduce transaction costs and risk, and as a result bring about widening, deepening and integration of capital markers. Such financial development accelerates the pace economic development through its favourable impact on saving investment, and output But this may exhort us to search for any possible drawbacks of the financial innovation in the credit marketABSTRACT FROM AUTHORCopyright of International Journal of Economic Perspectives is the property of International Economic Society and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder’s express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of th
