Why have general-purpose stored-value cards been unsuccessful in penetrating the U.S. market? Three necessary conditions for a payment instrument to be successful are discussed: consumers and merchants need to be convinced of its advantages over existing payment alternatives for at least some...

The regulatory framework established during the Great Depression was dismantled in stages after 1969. The deregulation of deposits at banks and savings institutions created incentives to widen the scope of investments that banks and thrifts could make. Novel instruments were created that should...

The current financial services industry crisis is attributed in large part to the mortgage industry debacle. The mortgage industry initially saw a rise in home values and therefore a rise in mortgage originations. This occurred during a period that witnessed a decline in short-term interest...

The financial crisis of 2008 has revealed a number of facts that we now acknowledge. We now know that liquidity matters very much, that the future may be unpredictable, that non-transparency, complexity,and ambiguity, combined with greed can lead to “management risks” that can derail...

This paper reviews the growth of the online business-to-business marketplaces and proposes that intense competition between and among horizontal hubs and vertical exchanges will lead to consolidation. Financial collaborative trading networks (CTNs) would follow as a consequence. CTNs allow...

The bankruptcy of Lehman Brothers in 2008 was a critical event in the Global Financial Crisis, exposing serious fault lines in the structure of global financial markets and leading to widespread economic disruption. But how did Lehman, a company of over 150 years’ experience in commodities...

In this article we describe how the risks in corporate action processing arise and provide some indications of the magnitude of these risks. We explain that corporate actions not only involve processing risks in the back office, but also significant trading risks in the front office. We conclude...

In this paper we will focus on the two problems that we feel are inherent within most financial institutions in relation to data, disparate systems and batch processing. We begin our analysis with a discussion of the problems associated with each and then describe how they might be solved in...

The current financial crisis that threatens the entire world has created an ideal opportunity for educators. A number of important lessons can be learned from this financial meltdown. Some are technical and deal with the value of mathematical models and measuring risk. The most important lesson,...

In light of the uncertainties about valuation highlighted by the 2007–2008 market turbulence, this paper provides an empirical examination of the potential procyclicality that fair value accounting (FVA) could introduce in bank balance sheets. The paper finds that, while weaknesses in the FVA...