FINANCIAL INNOVATION AND DIVISIA MONETARY AGGREGATES<sup>*</sup>

Ford, James L.; Peng, Weilin; Mullineux, Andy

doi:10.1111/j.1468-0084.1992.mp54001005.x

Cited by 21 publications

(8 citation statements)

References 7 publications

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“…It should be stressed that the approach followed here is by no means the only possible and does not represent a bullet-proof assessment of the information content of Divisia money or any other monetary aggregate. 29 It should nonetheless give some indications on whether the Divisia monetary aggregate constructed in this paper has indeed some value added from a forward-looking perspective.…”

Section: The Information Content Of Divisia Money In An Unrestricted Var Model Of the Euro Area Economymentioning

confidence: 88%

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Does Liquidity Matter? Properties of the Synthetic Divisia Monetary Aggregate in the Euro Area

Stracca

2001

SSRN Journal

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Section: The Information Content Of Divisia Money In An Unrestricted Var Model Of the Euro Area Economymentioning

confidence: 88%

“…This inclusion does not change the key features of the estimates, in particular as regards the impulse response profile. Moreover, a linear trend variable is found to be insignificant in all four equations, and it is therefore dropped from the model 29. For instance, another interesting approach, not followed here, is the one used by NicolettiAltimari (2001).…”

mentioning

confidence: 99%

Does Liquidity Matter? Properties of the Synthetic Divisia Monetary Aggregate in the Euro Area

Stracca

2001

SSRN Journal

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“…What evidence is there of the usefulness of financial innovation? Two major categories of benefit are usually identified: reduced financial transactions costs; and improved risk management (Ford et al, 1992;Mullineux, 1992;Ford and Mullineux, 1996).…”

Section: Good Financial Innovationmentioning

confidence: 99%

Financial innovation and social welfare

Mullineux

2010

Journal of Financial Regulation and Compliance

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Purpose -The purpose of this paper is to consider the case for regulating financial innovation in light of the recent global financial crisis. Design/methodology/approach -Responsibility for assuring the bank customers are "treated fairly" in the UK currents belongs to the Financial Services Authority (FSA), whilst the Office of Fair Trading (OFT) oversees the Consumer Credit Act. The paper argues for the regulation of retail banking and financial service provision as a utility, leaving the FSA to concentrate on prudential supervision and the OFT to concentrate on its other responsibilities. Financial innovation in wholesale and investment banking should be regulated by the prudential authorities. Findings -New financial instruments are frequently underpriced, which may be in part to encourage rapid and widespread adoption. Practical implications -Good, transactions cost and risk reducing, retail financial innovation should be encouraged. New wholesale financial products should be thoroughly "stress tested" prior to being licensed, analogous to the testing of new medical "drugs" by the pharmaceutical industry. Originality/value -The global banking crisis led to calls for banks to maintain lending to smalland medium-sized enterprises and households (especially mortgages). This implies that access to finance, like access to water and electricity, should be assured and that customers should be protected against the "monopoly" powers of large suppliers. Hence, retail banks are utilities and should be regulated as such.

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“…The academic literature on monetary aggregation (comprehensively reviewed by Barnett (1980) and Barnett et al (1992)) has consistently advocated the use of aggregation procedures that assign different weights to the various component assets of money (see for example, Belongia and Chalfont (1989), Belongia and Chrystal (1991) and Ford et al (1992)), where the weights are intended to reflect the differing characteristics of the assets. Typically, the Divisia (1925) weighting scheme has been proposed, although variants have been suggested (Rotemburg et al (1991)).…”

Section: Introductionmentioning

confidence: 99%