This dissertation was a study of the impact of financial innovation upon financial institutions and some of the collateral macroeconomics effects. Financial innovation has impacted the distribution of household assets throughout the Group of Seven (G-7) countries and indirectly negatively influenced the usage of traditional monetary aggregates as a reliable tool to forecast the growth in the domestic money supply between 1960 and 1990.
The empirical results indicate that the adoption of financial innovations by large U.S. commercial banks has not influenced their return on equity and the return of assets between 1990 and 1994. The variability of the return on equity and return on assets is reduced by those banks that have incorporated financial innovations over time.
The policy implications of these results indicate that sufficient market instruments exist to assist banks to control interest rate exposure caused by the volatility of interest rates and uncertain funding sources. Any intervention by regulatory authorities could be welfare-decreasing for banks and possibly increase the level of interest rates or reduce the supply of credit to prospective borrowers.
| Identifer | oai:union.ndltd.org:UTAHS/oai:digitalcommons.usu.edu:etd-4933 |
| Date | 01 May 1996 |
| Creators | Blanco, José C. |
| Publisher | DigitalCommons@USU |
| Source Sets | Utah State University |
| Detected Language | English |
| Type | text |
| Format | application/pdf |
| Source | All Graduate Theses and Dissertations |
| Rights | Copyright for this work is held by the author. Transmission or reproduction of materials protected by copyright beyond that allowed by fair use requires the written permission of the copyright owners. Works not in the public domain cannot be commercially exploited without permission of the copyright owner. Responsibility for any use rests exclusively with the user. For more information contact Andrew Wesolek (andrew.wesolek@usu.edu). |
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