Palgrave Macmillan Studies in Banking and Financial Institutions

Banking and Financial Markets

How Banks and Financial Technology Are Reshaping Financial Markets

Authors: Bilan, A., Degryse, H., O’Flynn, K., Ongena, S.

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  • Studies the interaction between traditional and modern banking and the economic benefits and costs of this new financial ecosystemRelies and analyzes the most recent empirical research in banking and finance
  • Explores the boundaries of the current banking research, what methods were used to get to these boundaries, and what challenges lay ahead in extending them
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About this book

The traditional role of a bank was to transfer funds from savers to investors, engaging in maturity transformation, screening for borrower risk and monitoring for borrower effort in doing so. A typical loan contract was set up along six simple dimensions: the amount, the interest rate, the expected credit risk (determining both the probability of default for the loan and the expected loss given default), the required collateral, the currency, and the lending technology. However, the modern banking industry today has a broad scope, offering a range of sophisticated financial products, a wider geography -- including exposure to countries with various currencies, regulation and monetary policy regimes -- and an increased reliance on financial innovation and technology. These new bank business models have had repercussions on the loan contract. In particular, the main components and risks of a loan contract can now be hedged on the market, by means of interest rate swaps, foreign exchange transactions, credit default swaps and securitization. Securitized loans can often be pledged as collateral, thus facilitating new lending. And the lending technology is evolving from one-to-one meetings between a loan officer and a borrower, at a bank branch, towards potentially disruptive technologies such as peer-to-peer lending, crowd funding or digital wallet services.
This book studies the interaction between traditional and modern banking and the economic benefits and costs of this new financial ecosystem, by relying on recent empirical research in banking and finance and exploring the effects of increased financial sophistication on a particular dimension of the loan contract. 

About the authors

Andrada Bilan is a PhD candidate in finance at the Swiss Finance Institute and University of Zurich, Switzerland.

Hans Degryse is a professor at KU Leuven, Belgium, and a research fellow in financial economics of CEPR, UK.

Kuchulain O'Flynn is a PhD candidate in finance at the Swiss Finance Institute and the University of Zurich, Switzerland.

Steven Ongena is  a senior chair at the Swiss Finance Institute and a professor at the University of Zurich, Switzerland, a research professor at KU Leuven, Belgium, and a research fellow in financial economics of CEPR, UK. 

Table of contents (8 chapters)

Table of contents (8 chapters)
  • Introduction

    Pages 1-4

    Bilan, Andrada (et al.)

  • Securitization and Lending

    Pages 5-30

    Bilan, Andrada (et al.)

  • Interest Rate Risk

    Pages 31-60

    Bilan, Andrada (et al.)

  • Credit Risk

    Pages 61-104

    Bilan, Andrada (et al.)

  • Collateral and Lending

    Pages 105-132

    Bilan, Andrada (et al.)

Buy this book

eBook n/a
  • ISBN 978-3-030-26844-2
  • Digitally watermarked, DRM-free
  • Included format: PDF, EPUB
  • ebooks can be used on all reading devices
Hardcover n/a
  • ISBN 978-3-030-26843-5
  • Free shipping for individuals worldwide
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Bibliographic Information

Bibliographic Information
Book Title
Banking and Financial Markets
Book Subtitle
How Banks and Financial Technology Are Reshaping Financial Markets
Authors
Series Title
Palgrave Macmillan Studies in Banking and Financial Institutions
Copyright
2019
Publisher
Palgrave Macmillan
Copyright Holder
The Editor(s) (if applicable) and The Author(s), under exclusive license to Springer Nature Switzerland AG
eBook ISBN
978-3-030-26844-2
DOI
10.1007/978-3-030-26844-2
Hardcover ISBN
978-3-030-26843-5
Series ISSN
2523-336X
Edition Number
1
Number of Pages
XI, 221
Number of Illustrations
4 b/w illustrations, 7 illustrations in colour
Topics