The Effects of Innovative Instruments to Market Participants and the Financial System: The Particular Role of Information Technologies

The Effects of Innovative Instruments to Market Participants and the Financial System: The Particular Role of Information Technologies

Demetres N. Subeniotis, Ioannis A. Tampakoudis
Copyright: © 2010 |Pages: 17
ISBN13: 9781605669960|ISBN10: 1605669962|EISBN13: 9781605669977
DOI: 10.4018/978-1-60566-996-0.ch014
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MLA

Subeniotis, Demetres N., and Ioannis A. Tampakoudis. "The Effects of Innovative Instruments to Market Participants and the Financial System: The Particular Role of Information Technologies." Pervasive Computing for Business: Trends and Applications, edited by Varuna Godara, IGI Global, 2010, pp. 204-220. https://doi.org/10.4018/978-1-60566-996-0.ch014

APA

Subeniotis, D. N. & Tampakoudis, I. A. (2010). The Effects of Innovative Instruments to Market Participants and the Financial System: The Particular Role of Information Technologies. In V. Godara (Ed.), Pervasive Computing for Business: Trends and Applications (pp. 204-220). IGI Global. https://doi.org/10.4018/978-1-60566-996-0.ch014

Chicago

Subeniotis, Demetres N., and Ioannis A. Tampakoudis. "The Effects of Innovative Instruments to Market Participants and the Financial System: The Particular Role of Information Technologies." In Pervasive Computing for Business: Trends and Applications, edited by Varuna Godara, 204-220. Hershey, PA: IGI Global, 2010. https://doi.org/10.4018/978-1-60566-996-0.ch014

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Abstract

Financial innovation triggered new ways in which financial institutions and corporates cope with credit risk since the advent of credit derivatives. A variety of new developed financial instruments, often complex products, offers significant advantages to market participants and its key players and in particular financial institutions. As statistics indicate, advanced computerization is by large the most important factor for the wide use of credit derivatives. More efficient loans portfolio management, further business expansion and confidentiality are the main benefits for banks. In addition, various non financial firms benefit from these tailor-made products. More importantly, credit derivatives are key elements of the financial systems’ stability, through increased liquidity, risk reallocation and credit risk pricing. Nevertheless, these innovative products are accompanied by significant considerations on behalf of users and policy makers. Out of which documentation, pricing, regulation and concentration are the central concerns. Market participants and regulators should face the challenges of credit derivatives market so as to boost the trouble-free intensive growth of these instruments.

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