giovedì 21 gennaio 2016

Financial Innovation - Michael Haliassos

Book published by MIT Press in 2013 short after the financial crisis that has devasted the world.
The innovation is a base for prosperous future and the major theme of this reading. Eleven chapters treat the history, psicology and the understanding of financial instruments, as the Inflation-Indexed Bond Markets, the Crisis and Innovation in the Housing Economy (too little innovation). Many studies are reported, theoretical aspects faced by mathematical explanations. Style Investing is another chapter that value the past experiences and the shortcomings into tackle the risk management that creates the crisis. The products as MacroMarkets for balancing the risk through hedging and correlation are the new possibilities that the world of finance try to present to institutional and private investors without patents availability to register. The failures are unpredictable in finance, but this mean that hedging products for housing market need to be implemented more and more because the main meaning of the crisis is that the price of houses can't be in growing forever and the innovation could be an answer. The general aim could be the enhancing of market liquidity and the last example concern the performance risk of small stocks capitalizations versus stocks with large capitalizations, described as a correlation from liquidity of equity to risk management in growth periods or small stocks performance vs blue chips.

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