Illuminating the Dark Side of Financial Innovation: The Role of Investor Information
Series
School of Finance Working Paper Series
Type
working paper
Date Issued
2017-03-10
Author(s)
Abstract (De)
This paper investigates the impact of investor information on financial innovation. We identify specific channels through which issuers of financially engineered products exploit retail investors by using their privileged access to information. Our results imply that imperfect investor information regarding volatility and dividends is crucial to explain the pricing and design of financially engineered products. We confirm our conjecture by exploiting a discontinuity in issuers' informational advantage. The insights are of systemic importance because they suggest that product issuers' behavior in the financial innovation market aggravates investor information problems of the financial system.
Language
English
Keywords
Structured Products
Investor Information
Financial Innovation
HSG Classification
contribution to scientific community
HSG Profile Area
None
Publisher
SoF - HSG
Publisher place
St. Gallen
Number
2017/04
Pages
50
Subject(s)
Eprints ID
250638
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Name
17_04_Ammann et al_Illuminating the Dark Side of Financial Innovation.pdf
Size
491.74 KB
Format
Adobe PDF
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