The impact of institutional investors and increasingly sophisticated financial instruments on risk and leverage

Mirosław Bojańczyk

MPRA Paper from University Library of Munich, Germany

Abstract: The volatility of capital markets is often blamed on the activities of institutional investors, or an excessive amount of financial instruments. It must be remembered that there are different institutional investors. Some of them play a very useful role without having a negative impact on the stability of the capital market. The same is true various instruments, many of them play a useful role. Many companies have long used derivatives to hedge against business risks, using them to manage fluctuations in exchange rates, interest rates, commodity prices, etc.

Keywords: investment banks; institutional investors; financial instruments; risk; leverage; financial crises (search for similar items in EconPapers)
JEL-codes: E44 G20 G24 (search for similar items in EconPapers)
Date: 2010-06-20
New Economics Papers: this item is included in nep-ban
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