New Horizons in Money and Finance series
Edited by Luisa Anderloni, David T. Llewellyn and Reinhard H. Schmidt
Paolo Mottura Financial innovation has by now become a permanent and irreversible phenomenon, which therefore deserves to be continuously studied in order to understand its origins and drivers, to analyse its various forms, to evaluate its positive and negative externalities at the macroeconomic level and ﬁnally to investigate the organic relationship with the competitive strategies of ﬁnancial intermediaries. The current and prospective context of ﬁnancial globalisation – which involves both capital markets and ﬁnancial intermediaries – is characterised by particularly intense competition, onto which ﬁnancial regulatory authorities try to impose certain rules, without, however, imposing limits. Obviously the challenge lies in trying to achieve the dual objective of, on the one hand maximising positive externalities, in other words the beneﬁts of innovation for the real economy itself, and on the other, limiting as far as possible the negative externalities that innovation inﬂicts on real economies and on the return/risk performance for stakeholders (ﬁnancial intermediaries, ﬁrms, investors, public administrations and so forth). As far as the strategy of ﬁnancial intermediaries is concerned, innovation has now become an instrument or, as some would say, a crucial competitive weapon. Process innovation, strongly supported and stimulated by new technologies, plays an essential role as a factor of diﬀerentiation between the single producer and his/her competitors. Process innovation is focused on obtaining results and levels of productivity and slashing the costs of production and distribution (cost leadership), as well as improving the quality and reliability of the procedures themselves for the beneﬁt of...