Are structured products a sustainable financial innovation? A lesson from the European markets

Alberto Burchi () and Paola Musile Tanzi ()
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Alberto Burchi: University of Perugia, Postal: University of Perugia, Department of Economics, Via A.Pascoli, 20, 06123 Perugia (Italy), http://www.unipg.it/pagina-personale?matricola=008526
Paola Musile Tanzi: University of Perugia and SDA Bocconi School of Management, Postal: University of Perugia, Department of Economics, Via A.Pascoli, 20, 06123 Perugia (Italy), http://www.unipg.it/it/pagina-personale?matricola=005467

Journal of Financial Perspectives, 2014, vol. 2, issue 3, 147-158

Abstract: Structured products are a complex outcome of the financial innovation process, and what many would like to know is who profits from this kind of financial innovation and whether issuers are influenced by market trends. Taking into account the complexity of structured products, we analyze the payoff of 14,701 roducts issued in Europe that expired between January 2008 and December 2012. Observing the issuers’ time–to–market, we find a negative relationship between the volumes issued and the number of listed products, which could be construed as a signal for pushing behavior on the part of issuers. Considering that, the product intervention approach by the regulators could be useful in discouraging the pushing behaviors.

Keywords: financial innovation; derivatives; structured products; certificates; financial regulation; product intervention approach (search for similar items in EconPapers)
JEL-codes: G10 G18 G21 (search for similar items in EconPapers)
Date: 2014
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Persistent link: https://EconPapers.repec.org/RePEc:ris:jofipe:0053

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