Latin American Financial Markets: Developments in Financial Innovations

2005 ◽  
Keyword(s):  
Financial Markets ◽  
Latin American ◽  
Financial Innovations

Schumpeterian economic development and financial innovations: a conflicting evolution

2014 ◽  
Vol 10 (2) ◽  
pp. 257-277 ◽  
Author(s):  
FARUK ÜLGEN
Keyword(s):  
Economic Development ◽  
Financial Markets ◽  
Regulatory Mechanisms ◽  
Economic Evolution ◽  
Destruction Process ◽  
Economic Stability ◽  
Institutional Dynamics ◽  
Financial Innovations

Abstract:Although in the Schumpeterian process of entrepreneurial innovations money and financial markets are assumed to affect economic development, Schumpeter does not explicitly study financial evolution and its effects on real dynamics. In order to fill this gap, this article suggests a Minsky-inspired interpretation of Schumpeterian institutional dynamics in monetary terms. It then develops a specific Schumpeterian analysis of the evolution of financial institutions and regulatory mechanisms in the wake of the 2007–08 crisis and points to major consequences of financial innovations on economic stability. It appears that unlike the creative destruction process of entrepreneurial innovations, in a liberalised/deregulated environment financial innovations move banks from their crucial role of financing long-term economic evolution and lead to reckless finance. Thus, financial market dynamics put economies on a destructive path. Such an evolution calls for active and tight rational regulation in order to shape capitalist finance towards more stable and welfare-enhancing strategies.

scholarly journals Capital structure and corporate governance: the French case

2008 ◽  
Vol 5 (2) ◽  
pp. 427-433
Author(s):  
Esther Jeffers ◽  
Dominique Plihon
Keyword(s):  
Corporate Governance ◽  
Capital Structure ◽  
Financial Markets ◽  
World Economy ◽  
Corporate Strategies ◽  
Financial Innovations ◽  
The World ◽  
French Case ◽  
The Impact ◽  
The Capital Structure

The world economy has undergone major changes during the last twenty years. Financial markets have grown spectacularly on the international level. In particular, stock markets rose substantially in the 1990s. At the same time, the combined process of deregulation and financial innovations transformed the internationalization of financial activities into financial globalization, which witnessed a considerable strengthening of both the impact and freedom of action of the main players. France did not remain unaffected by this evolution, much the contrary. This was all the more impressive given the historical weakness of the country’s financial markets. Many studies have been devoted to the growth of financial markets and many others to corporate governance, but the influence of the capital structure and the forms of governance on corporate strategies have rarely been empirically evaluated in the literature, due to the scarcity of relevant data. This paper aims at understanding (I) how the capital structure of French corporations has changed and, through an empirical study, (II) how this change may have impacted their strategy

scholarly journals FINANCIAL CONTAGION BETWEEN THE US AND EMERGING MARKETS: COVID-19 PANDEMIC CASE

2020 ◽  
Author(s):  
Paula Heliodoro ◽  
◽  
Rui Dias ◽  
Paulo Alexandre ◽  
◽  
...  
Keyword(s):  
Financial Markets ◽  
Latin American ◽  
Stock Markets ◽  
Null Hypothesis ◽  
Sustainable Growth ◽  
Financial Contagion ◽  
Policy Makers ◽  
Global Pandemic ◽  
The Us ◽  
Bds Test

To realise how crises are disseminated is relevant for policy makers and regulators in order to take appropriate measures to prevent or contain the propagation of crises. This study aims to analysis the financial contagion in the six main markets of Latin America (Argentina, Brazil, Chile, Colombia, Mexico and Peru) and the USA, in the period 2015-2020. Different approaches have been undertaken to carry out this analysis in order to consider the following research question, namely whether: (i) the global pandemic covid19 has accentuated the contagion between Latin American financial markets and the US? The results of the autocorrelation tests are totally coincident with those obtained by the BDS test. The rejection of the null hypothesis, i.i.d., can be explained, among other factors, by the existence of autocorrelation or by the existence of heteroscedasticity in the stock market index series, in which case the rejection of the null hypothesis is explained by non-linear dependence on data, with the exception of the Argentine market. However, significant levels of contagion were expected to occur between these regional markets and the US as a result of the global pandemic (Covid-19), which did not happen. These results may indicate the implementation of efficient diversification strategies. The authors consider that the results achieved are relevance for investors who seek opportunities in these stock markets, as well as for policy makers to carry out institutional reforms in order to increase the efficiency of stock markets and promote the sustainable growth of financial markets.

CEE's own risks pose a greater threat than China

2015 ◽  
Keyword(s):  
Financial Markets ◽  
Interest Rates ◽  
Latin American ◽  
Investor Sentiment ◽  
Government Bonds ◽  
Content Type ◽  
East European ◽  
Asset Class ◽  
Trade And Financial Linkages ◽  
Better Than

Subject CEE markets' resilience to China-induced sell-off. Significance While investor sentiment towards emerging markets (EMs) has deteriorated further because of mounting concerns about China's economy and financial markets, the currencies and government bonds of the main Central-East European (CEE) economies have proved remarkably resilient. Even equity markets, which have suffered sharp falls across the EM asset class, have fared better than in other regions, with Polish, Hungarian and Czech stocks falling by 5.0-6.0% in dollar terms in August, compared with 10.0% and 9.5% for emerging Asian and Latin American shares, respectively. CEE markets' resilience stems from the region's negligible trade and financial linkages to China, relatively strong fundamentals and the sentiment-boosting effects of the ECB's programme of quantitative easing (QE). Impacts EMs' significantly stronger fundamentals make comparisons between the current China-led sell-off and earlier crises in the 1990s misleading. There will continue to be a strong correlation between CEE financial markets and price action in the euro-area. The ECB's full-blown QE should help mitigate the adverse effects of a rise in US interest rates. Very high foreign participation in Polish and Hungarian government debt poses a risk should sentiment towards EMs deteriorate more sharply.

scholarly journals Are the Financial Markets Sensitive to Hydrological Risk? Evidence from the Bovespa

Water ◽  
2020 ◽  
Vol 12 (11) ◽  
pp. 3011
Author(s):  
José Manuel Feria-Domínguez ◽  
Pilar Paneque ◽  
Fanny de la Piedra
Keyword(s):  
Climate Change ◽  
Financial Markets ◽  
Latin American ◽  
Abnormal Returns ◽  
Perishable Products ◽  
Study Analysis ◽  
Food Sector ◽  
Change Impact ◽  
Latin American Countries ◽  
Sample Versus

This research analyzes the BOVESPA stock market response to the worst drought occurred in the last 100 years in Brazil. For this purpose, we conducted a standard event study analysis in order to assess the financial response to such hydrological risk on a sample of seven Brazilian agri-food firms. We found statistically significant negative cumulative average abnormal returns (CAARs) around the drought official announcement for different event windows used. Particularly, the highest impact was obtained for the narrowest temporary window, five days around the event disclosure. Moreover, we also found the drought announcement affects even more negatively those companies that sell perishable products, five out of seven in our sample, versus those selling nonperishable ones by running a two-sample t-test on CAARs. This study brings awareness to the climate change impact into the emerging financial markets and the risk faced by shareholders when investing in the agri-food sector, not only in Brazil but also in other Latin American countries, due to the increasing probability to suffer from droughts.

The Restructuring of the Financial System in the 21st century

2019 ◽  
pp. 30-51
Author(s):  
Elisabeth T. Pereira
Keyword(s):  
Financial Markets ◽  
21St Century ◽  
Global Economy ◽  
Financial System ◽  
Developed Economies ◽  
Financial Innovations ◽  
Structure Changes ◽  
Current Century ◽  
Technology Market ◽  
Main Determinants

The financial system on the first decades of the 21st century followed the trend of the last decades of the 20th century with corporate restructuring and international financial markets integration and delocalization being oriented by profits and mergers and acquisitions. The global economy and financial structure changes, in the current century, derived from financial innovations, market deregulation, globalization, technology, market structure changes, regulatory reforms, and (re)formulation of central banks' monetary policy. Currently, the financial system is interconnected, interactive, interdependent, and became over-leveraged. The present chapter focuses on the analysis of the evolution of the financial system and the main determinants of global financial markets restructuring on last decades to explain the relevant changes verified in the financial system in the 21st century. After a literature review, an evaluative and descriptive macro analysis of the financial system is presented to study the process of restructuring of the financial system in the main developed economies.

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