Potential Impact of Financial Innovation on Financial Services and Monetary Policy

Marek Dabrowski

No 488, CASE Reports from CASE-Center for Social and Economic Research

Abstract: The recent wave of financial innovation, particularly innovation related to the application of information and communication technologies, poses a serious challenge to the financial industry’s business model in both its banking and non-banking components. It has already revolutionised financial services and, most likely, will continue to do so in the future. If not responded to adequately and timely by regulators, it may create new risks to financial stability, as occurred before the global financial crisis of 2007-2009. However, financial innovation will not seriously affect the process of monetary policymaking and is unlikely to undermine the ability of central banks to perform their price stability mission. The recent wave of financial innovation, particularly innovation related to the application of information and communication technologies, poses a serious challenge to the financial industry’s business model in both its banking and non-banking components. It has already revolutionised financial services and, most likely, will continue to do so in the future. If not responded to adequately and timely by regulators, it may create new risks to financial stability, as occurred before the global financial crisis of 2007-2009. However, financial innovation will not seriously affect the process of monetary policymaking and is unlikely to undermine the ability of central banks to perform their price stability mission.

Keywords: monetary policy; financial innovation; electronic money (search for similar items in EconPapers)
JEL-codes: E41 E44 E51 E52 E58 G21 (search for similar items in EconPapers)
Pages: 26
Date: 2017-07
New Economics Papers: this item is included in nep-cba, nep-cse, nep-ino, nep-mac, nep-mon and nep-pay
References: Add references at CitEc
Citations: View citations in EconPapers (6)

Downloads: (external link)
https://case-research.eu/uploads/zalacznik/2017-07 ... _monetary_policy.pdf (application/pdf)
Our link check indicates that this URL is bad, the error code is: 404 Not Found

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:sec:report:0488

Access Statistics for this paper

More papers in CASE Reports from CASE-Center for Social and Economic Research Contact information at EDIRC.
Bibliographic data for series maintained by Marta Kowerko ().