Influence of mathematical models in finance on practice: past, present and future

1994 ◽  
Vol 347 (1684) ◽  
pp. 451-463 ◽  
Keyword(s):  
Mathematical Models ◽  
Financial Markets ◽  
Financial Institutions ◽  
Optimization Theory ◽  
Financial Modelling ◽  
The Past ◽  
Markets And Institutions ◽  
Finance Theory ◽  
Financial Research

The mathematics of finance contains some of the most beautiful applications of probability and optimization theory. Yet despite its seemingly abstruse mathematics, finance theory over the last two decades has found its way into the mainstream of finance practice. Today much of the applied financial research on the use of mathematical models takes place within financial institutions. It was not always thus. The scientific breakthroughs in financial modelling both shaped and were shaped by the extraordinary flow of financial innovation which coincided with revolutionary changes in the structure of world financial markets and institutions during the past two decades. The paper covers that development with a focus on the future role of mathematical models in finance practice.

Impact of FII’s and FDI’s on Indian Stock Market

2016 ◽  
Vol 1 (1) ◽  
Author(s):  
Dr. Kamlesh Kumar Shukla
Keyword(s):  
Stock Market ◽  
Financial Markets ◽  
Global Economy ◽  
Short Term ◽  
Earnings Growth ◽  
The Past ◽  
Bull Market ◽  
Indian Stock Market

FIIs are companies registered outside India. In the past four years there has been more than $41 trillion worth of FII funds invested in India. This has been one of the major reasons on the bull market witnessing unprecedented growth with the BSE Sensex rising 221% in absolute terms in this span. The present downfall of the market too is influenced as these FIIs are taking out some of their invested money. Though there is a lot of value in this market and fundamentally there is a lot of upside in it. For long-term value investors, there’s little because for worry but short term traders are adversely getting affected by the role of FIIs are playing at the present. Investors should not panic and should remain invested in sectors where underlying earnings growth has little to do with financial markets or global economy.

The Impact of Debt on Economic Development of the Western Balkan Countries

2020 ◽  
Vol 58 (3) ◽  
pp. 363-379
Author(s):  
Mehdija Ćosović
Keyword(s):  
Financial Markets ◽  
Financial Institutions ◽  
Current Account Deficit ◽  
External Debt ◽  
International Financial Institutions ◽  
The Balkans ◽  
The Past ◽  
Balkan Countries ◽  
The Impact ◽  
Selection Of

Abstract The degree of increased indebtedness in the Western Balkan countries is generated by increasing consumption in terms of increased economic growth and structural reforms. Although these countries have shown an increase in exports and foreign direct investment over the past few years, the current account deficit remains high, especially in the ratio between external debt and GDP, which is not only high but at the stage of growth. Also, as domestic financial markets are underdeveloped, these countries are to a large extent exposed to an increase in the price of foreign borrowing. The current borrowing policy continues with increasing investment in non-productive consumption, which requires renewed borrowing. The presentation of debt trends, analysis and comparison of external debt of these countries show relevant guidelines in the selection of an adequate economic policy that would enhance the competitiveness of this part of the Balkans. Also, a comparative analysis of the indebtedness ratio will especially assess the state of indebtedness in Serbia, the structure and the movement of external debt towards international financial institutions. The comparison in this paper is made using standard indices of indebtedness based on the data obtained from the national statistical institutes and international financial institutions.

scholarly journals Rethinking the Effects of Financial Globalization *

2016 ◽  
Vol 131 (3) ◽  
pp. 1497-1542 ◽  
Author(s):  
Fernando Broner ◽  
Jaume Ventura
Keyword(s):  
Financial Markets ◽  
Capital Flows ◽  
Capital Inflows ◽  
Financial Globalization ◽  
The Past ◽  
Domestic Capital ◽  
Domestic Savings ◽  
Financial Transactions

Abstract During the past three decades, many countries have lifted restrictions on cross-border financial transactions. We present a simple model that can account for the observed effects of financial globalization. The model emphasizes the role of imperfect enforcement of domestic debts and the interactions between domestic and foreign debts. Financial globalization can lead to a variety of outcomes: (i) domestic capital flight and ambiguous effects on net capital flows, investment, and growth; (ii) capital inflows and higher investment and growth; or (iii) volatile capital flows and unstable domestic financial markets. The model shows how the effects of financial globalization depend on the level of development, productivity, domestic savings, and the quality of institutions.

scholarly journals Climate Litigation in Financial Markets: A Typology

2019 ◽  
Vol 9 (1) ◽  
pp. 103-135 ◽  
Author(s):  
Javier Solana
Keyword(s):  
Financial Markets ◽  
Research Area ◽  
Financial Systems ◽  
Public Authorities ◽  
The Past ◽  
The World ◽  
Private And Public ◽  
Sustainable Finance ◽  
New Research

AbstractOver the past few years, the number of climate cases being filed against corporations and public authorities around the world has been on the rise. Aware of the central role of finance in economic development, the financial sector has remained vigilant. Traditionally, climate litigation in financial markets had been rare, but that seems to be changing: in 2018 there were more cases filed than in any previous year. The development of existing and forthcoming private and public sector initiatives with the aim of promoting sustainable finance may usher in even greater numbers in the next few years. This article provides the first systematic overview of climate cases in financial markets and introduces a typology to classify this type of climate case. This classification reveals common issues across different financial systems and raises questions for further enquiry that define a new research area within the emerging literature on climate litigation.

scholarly journals Formal rural financial markets in Nigeria: An attractive or deceptive development alternative?

2000 ◽  
Vol 3 (3) ◽  
pp. 469-483
Author(s):  
Gabriel S. Umoh
Keyword(s):  
Financial Markets ◽  
Financial Institutions ◽  
Agricultural Cooperative ◽  
Self Help ◽  
Rural Financial Markets

This paper uses the outreach paradigm to examine the role of two formal rural financial institutions (Nigerian Agricultural Cooperative Bank and People's Bank of Nigeria) in development financing in Nigeria. Findings show that the two institutions have fared relatively well in the outreach to their target clientele, except women. The paper also suggests that for wider outreach, effective linkage with rural self-help is necessary.

Financial Structure and Incentives

2012 ◽  
Vol 221 ◽  
pp. R23-R30
Author(s):  
Martin Čihák ◽  
Asli Demirgüç-Kunt
Keyword(s):  
Financial Markets ◽  
Financial Institutions ◽  
Risk Taking ◽  
Global Financial Crisis ◽  
Financial Sector ◽  
Financial Systems ◽  
Regulatory Approach ◽  
Private Incentives ◽  
The Global Financial Crisis

The article connects two streams of recent research on the financial sector. The first is the regulation literature, which emphasises the central role of incentives in the financial sector. It points out that the challenge of financial sector regulation, highlighted by the global financial crisis, is to align private incentives with public interest without taxing or subsidising private risk-taking. The second stream of research relates to financial structures and examines the mix of financial institutions and financial markets in an economy. It finds that, as economies develop, services provided by financial markets become comparatively more important than those provided by banks. The article brings these two streams together, pointing out that — as financial systems develop from bank-based to market-based — a traditional regulatory approach that relies on banking ratios becomes less effective. There is thus a greater need for properly monitoring and addressing the underlying incentive weaknesses in market-based systems.

Systemic Risk in Financial Services

2011 ◽  
Vol 16 (2) ◽  
pp. 195-300 ◽  
Author(s):  
D. Besar ◽  
P. Booth ◽  
K. K. Chan ◽  
A. K. L. Milne ◽  
J. Pickles
Keyword(s):  
Financial Markets ◽  
Systemic Risk ◽  
Financial Services ◽  
Financial Crises ◽  
Financial System ◽  
Policy Makers ◽  
Large Aggregate ◽  
The Past ◽  
Markets And Institutions ◽  
Aggregate System

AbstractThe current banking crisis has reminded us of how risks materialising in one part of the financial system can have a widespread impact, affecting other financial markets and institutions and the broader economy. This paper, prepared on behalf of the Actuarial Profession, examines how such events have an impact on the entire financial system and explores whether such disturbances may arise within the insurance and pensions sectors as well as within banking. The paper seeks to provide an overview of a number of banking and other financial crises which have occurred in the past, illustrated by four case studies. It discusses what constitutes asystemicevent and what distinguishes it from a large aggregate system wide shock. Finally, it discusses how policy-makers can respond to the risk of such systemic financial failures.

Does Financial Development Lead to Employment and Growth?

2020 ◽  
pp. 1-20
Author(s):  
Murat Gündüz ◽  
Yunus Özyıldırım
Keyword(s):  
Financial Markets ◽  
Financial Development ◽  
Financial Institutions ◽  
Financial Systems ◽  
G7 Countries ◽  
Causality Test ◽  
Fund Flow ◽  
Markets And Institutions ◽  
Causality Relationship ◽  
The Uk

Financial systems, which play a major role in the development of the economy, are primarily helping to fund flow and assist in capital increase. In this study, frequency domain causality test, which was developed by Geweke and Hosoya and developed by Breitung and Candelon, was used to analyze the causality relationship by short, medium, and long periods. This test, which provides periodical examination, was investigated to determine the effect of G7 countries on employment and growth of financial institutions and markets index used to calculate financial development index. Among the G7 countries, the development of financial markets and institutions has been affecting employment in Canada (short-medium), Germany (medium-long), Japan (short-medium-long), and the UK (medium-long); in addition, when the effects of economic growth on financial markets and institutions are investigated, Canada (short-medium), France (medium), Italy (medium-long), America (medium-long), Germany (medium-long), Japan (short-medium-long), and UK (short-medium-long) were determined by analysis.

scholarly journals Recent Macroeconomic Dynamics and Agriculture in Historical Perspective

2010 ◽  
Vol 42 (3) ◽  
pp. 467-476 ◽  
Author(s):  
David Orden
Keyword(s):  
Monetary Policy ◽  
Financial Markets ◽  
Exchange Rates ◽  
Interest Rates ◽  
Public Discourse ◽  
Historical Perspective ◽  
Macroeconomic Dynamics ◽  
The Past ◽  
Misery Index

This article explores the similarities, differences, and implications from the 1970s-1980s experience for the macroeconomic dynamic that may arise from the 2008 price spike and subsequent recession. Role of monetary policy (deviations from Taylor rule) is assessed. This is an argument that has not been too prominent in public discourse about causes of the financial crisis or the policies undertaken to restore stability to financial markets and avoid an even deeper downturn than occurred. The “misery index” is compared across the past and recent macroeconomic events. Effects on agriculture of exchange rates are reviewed, effects dependent on currency values and interest rates that can change quickly and in unexpected ways.

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