Role of Financial Innovations in Proliferation of Economic Instability

335
DOI: 10.20542/0131-2227-2011-6-56-64

I. Strelets, MGIMO University, 76, Prosp. Vernadskogo, Moscow, 119454, Russian Federation (i_strelets@mail.ru).
M. Stolbov, MGIMO University, 76, Prosp. Vernadskogo, Moscow, 119454, Russian Federation (stolbov_mi@mail.ru)

Abstract. The authors consider the impact of financial innovations on the macroeconomic situation. The increasing complexity of financial market instruments is the way to decrease its transparency and, consequently, the overall economic stability. The global crisis of 2008-2009 demonstrated the relevance of this problem. However, the authors believe that the nations can take advantage of new financial products, technologies and business processes if the regulators manage to fully track and timely offset the accompanying risks. It is important that execution of the financial innovations correspond with the structure of the funding companies and banks. It is concluded that adequate regulation of financial innovation will allow better use of their potential in order to address a number of important economic issues. In particular, it may help to accelerate the development and introduction of new drugs, to the implementation of environmental projects, the financing of social progress in the developing countries for achieving the Millennium Goals proclaimed by the UN in 2000.

Keywords: financial innovation, competition, financial patents, monopolistic competition, oligopoly, catering theory of financial innovation, local thinking


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For citation:
Strelets I., Stolbov M. Role of Financial Innovations in Proliferation of Economic Instability. World Eonomy and International Relations, 2011, no. 6, pp. 56-64. https://doi.org/10.20542/0131-2227-2011-6-56-64



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