Financial Markets and Institutions

The speed and direction of countries’ economic development are tightly linked to the structure, size, and quality of their financial markets.  Technological and digital communication advances have had an enormous impact on the development of financial markets over the last few decades.  The development and growth of financial intermediaries such as banks, mutual funds, pension funds, hedge funds, asset management companies, venture capitalists, etc., have created new investment and growth opportunities and challenges. These traditional financial markets and institutions are now challenged by technological and platform innovations led by a new wave of finance entrepreneurs, including equity crowdfunding and trading applications.  Therefore, we study the characteristics of financial markets and institutions to inform the debate on their strengths, weaknesses, and regulations needed to improve their functioning and contribution to economic development, particularly in advancing financial innovation.

Examples of our engagement and contribution to practice and policy/regulatory debates

Mahmoud Fatouh’s research contributes to a better understanding and evaluation of effects of banking regulation:

• The pro-cyclicality of capital ratios and credit supply, a tale of two sizes (also covered by Central Banking)

• Convertible or not: making sense of stresses in AT1 bonds market

• CoCo bonds and the risk appetite of banks: sweet or sour relationship

• Impact of the UK QE on banks’ balance sheets (also covered by Central Banking)

• Where is IFRS 9 taking the cost of funding of banks? 

Ning Baines is leading a project into factors and contexts influencing consumers’ adoption of Central Bank Digital Currencies.