Financial Innovation in Emerging Markets - Possible Benefits and Risks
9 Pages Posted: 4 Sep 2008
Date Written: September 3, 2008
This study examines the factors, both micro- and macro-economic, responsible for financial innovations in Emerging Markets. The possible benefits and threats of financial innovations in Emerging Market Economies are also analysed. Financial innovations lower cost of capital, reduce financial risks, improve financial intermediation, and hence welfare enhancing. However, financial innovations are not risk-free; they can create or exacerbate risk.
Keywords: Financial Innovation, Emerging Markets, Risks
JEL Classification: E44, G00, G19
Suggested Citation: Suggested Citation