文档介绍：Journal of
BANKING &
FINANCE
ELSEVIER Journal of Banking & Finance 19 (1995) 461-481
Financial innovation and the management and
regulation of financial institutions
Robert C. Merton
The Harvard Business School, Morgan 397, Soldiers Field, Boston, MA 02163, USA
Abstract
New security designs, improvements puter and munications technology
and advances in the theory of finance have led to revolutionary changes in the structure of
financial markets and institutions. This paper provides a functional perspective on the
dynamics of institutional change and uses a series of examples to illustrate the breadth and
depth of institutional change that is likely to occur. These examples emphasize the role of
hedging versus equity capital in managing risk, the need for risk accounting and changes in
methods for implementing both regulatory and stabilization public policy.
Keywords: Financial innovation; Banking; Finance
JEL classification: G2; G3
1. Introduction
Risk management of financial institutions and the role of capital is a rich and
topical subject from the perspectives of both academics and practitioners. How-
ever, my remarks here will not focus on either risk-based capital or deposit
insurance or even the performance of financial institutions, i Along those dimen-
sions, it is clear from the agenda that we all will find our cups abundantly filled on
these topics over the course of the conference. Instead, in this salutatory session, I
try my hand at creating a frame of reference for what is to follow by describing
1 The definition and measurement of risk capital and its distinction from either cash capital or
regulatory capital is discussed in Merton and Perold (1993).
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462 . Merton /Journal of Banking & Finance 19 (1995) 461--481
prospectively some of the changes in the evolving financial system and by