Financial functional analysis: a conceptual framework for understanding the changing financial system

Wilson, John P.; Campbell, Lisa C.

doi:10.1080/1350178x.2016.1157200

Cited by 13 publications

(11 citation statements)

References 27 publications

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“…The financial system is currently undergoing a revolution driven by e-Finance, digital convergence, the emergence of new market participants, and government-encouraged competition. New market entrants such as Apple, Alibaba, Facebook, and Google come from industries such as retail, social media, and telecommunications, and therefore do not fit into traditional financial institutional structures [25]. Platforms provide users with various social and technical boundary resources, such as application programming interfaces (APIs) that provide access to data, software development kits and various templates that dramatically lower the cost of use.…”

Section: Literature Reviewmentioning

confidence: 99%

Global Challenges of Digital Transformation of Markets: Collaboration and Digital Assets

et al. 2021

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Cyber-physical system (CPS) and digital twin (DT) technologies are the key enablers of smart manufacturing. The main idea of CPS is to build bi-directional interaction channels between the physical and cyber worlds. The research gap is ontological consideration of the concept of the digital object (DO) as a representation of a physical object (PO) in the digital space/world. The objective of this study is an ontological analysis of the digital object (DO). This object is fairly well-understood from a technical point of view; although there are many options for its definition, its basic composition and functionality are defined clearly, but currently in the economic science DO has not yet been enough considered. The DO, which first appeared as a digital twin has not been properly explored by economic science. Authors attempt to determine whether all the properties and characteristics of the DO are described by modern economic language or whether there is a need to introduce new concepts and categories to describe such objects. The ontological analysis of the DO within the existing conceptual framework of economic science is presented. The result of the research is comprehensive study of DO which allows the consideration of the additional benefits that economic actors can gain from using the DO. We propose to analyze the DO in terms of such economic categories as goods; innovation process; the system of division of labor; the role of market participants in the creation and use of the DO; intellectual property; etc.

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Section: Literature Reviewmentioning

confidence: 99%

Global Challenges of Digital Transformation of Markets: Collaboration and Digital Assets

et al. 2021

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“…The nancial system is currently undergoing a revolution driven by e-Finance, digital convergence, the emergence of new market participants, and government-encouraged competition. New market entrants such as Apple, Alibaba, Facebook, and Google come from industries such as retail, social media, and telecommunications, and therefore do not t into traditional nancial institutional structures (Wilson and Campbell 2016). Platforms provide users with various social and technical boundary resources, such as application programming interfaces (APIs) that provide access to data, software development kits and various templates that dramatically lower the cost of use.…”

Section: Literature Reviewmentioning

confidence: 99%

Global Challenges of Digital Transformation of Markets: Collaboration and Digital Assets

Yadikin

Barykin

Badenko

et al. 2021

Preprint

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The objective of this study is an ontological analysis of the digital object (DO), of a relatively recent phenomenon that has emerged in relation to the performance of production enterprises. We analyzed the additional benefits that economic actors can gain from using the DO. This object is fairly well-understood from a technical point of view; although there are many options for its definition, its basic composition and functionality are defined clearly, but currently in the economic science DO has not yet been enough considered. The DO, which first appeared as a digital twin has not been properly explored by economic science. The ontological analysis of the DO within the existing conceptual framework of economic science are presented. The DO is comprehensively examined to determine whether all the properties and characteristics of the DO are described by modern economic language or whether there is a need to introduce new concepts and categories to describe such objects. We propose to analyze the DO in terms of such economic categories as goods, innovation process, the system of division of labor, the role of market participants in the creation and use of the DO, intellectual property, etc.

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“…To analyze how and why financial institutions differ across borders and change over time, Merton adopted a framework he called the functional perspective ; for an alternative description and extension of the functional perspective, see Wilson & Campbell 2016). 16 The key element in the framework is its focus on functions rather than on institutions as the conceptual "anchor" (see Merton , 2007a.…”

Section: The Functional Perspectivementioning

confidence: 99%

Robert C. Merton and the Science of Finance

Bodie

2020

Annu. Rev. Financ. Econ.

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Starting with his 1970 doctoral dissertation and continuing to today, Robert C. Merton has revolutionized the theory and practice of finance. In 1997, Merton shared a Nobel Prize in Economics “for a new method to determine the value of derivatives.” His contributions to the science of finance, however, go far beyond that. In this article I describe Merton's main contributions. They include the following: 1. The introduction of continuous-time stochastic models (the Ito calculus) to the theory of household consumption and investment decisions. Merton's technique of dynamic hedging in continuous time provided a bridge between the theoretical complete-markets equilibrium model of Kenneth Arrow and the real world of personal financial planning and management. 2. The derivation of the multifactor Intertemporal Capital Asset Pricing Model (ICAPM). The ICAPM generalizes the single-factor CAPM and explains why that model might fail to properly account for observed market excess returns. It also provides a theory to identify potential forward-looking risk premia for use in factor-based investment strategies. It is therefore both a positive and normative theory. 3. The invention of Contingent Claims Analysis (CCA) as a generalization of option pricing theory. CCA applies the technique of dynamic replication to the valuation and risk management of a wide range of corporate and government liabilities. Merton's CCA model for the valuation and analysis of risky debt is known among scholars and practitioners alike as the Merton Model. 4. The development of financial engineering, which employs CCA to design and produce new financial products. Merton was the first to apply CCA to analyze government guaranty programs such as deposit insurance, and to suggest improvements in the way those programs are managed. He and his students have applied his insights at both the micro and macro policy levels. 5. And finally, the development of a theory of financial intermediation that explains and predicts how financial systems differ across countries and change over time. Merton has applied that theory, called functional and structural finance, to guide the design and regulation of financial systems at the levels of the firm, the industry, and the nation. He has also used it to propose reforms in pensions, sovereign wealth funds, and macrostabilization policy. This article is one of a pair of articles published in this volume about Robert C. Merton's contributions to the science of financial economics. This article was originally published in Volume 11 of the Annual Review of Financial Economics. The other article in this pair is “ Robert C. Merton: The First Financial Engineer ” by Andrew W. Lo.

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Financial functional analysis: a conceptual framework for understanding the changing financial system

Cited by 13 publications

References 27 publications

Global Challenges of Digital Transformation of Markets: Collaboration and Digital Assets

Global Challenges of Digital Transformation of Markets: Collaboration and Digital Assets

Global Challenges of Digital Transformation of Markets: Collaboration and Digital Assets

Robert C. Merton and the Science of Finance

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