Abstract: This paper provides a brief introduction to forecasting in financial markets with emphasis on commodity futures and foreign exchange. We describe the basic approaches to forecasting, and discuss the noisy nature of financial data. Using neural networks as a learning paradigm, we describe different techniques for choosing the inputs, outputs, and error function. We also describe the learning from hints technique that augments the standard learning from examples method. We demonstrate the use of hints in foreign-exchange trading of the U.S. Dollar versus the British Pound, the German Mark, the Japanese Yen, and the Swiss Franc, over a period of 32 months. The paper does not assume a background in financial markets.

Abstract: This paper investigates whether the balance sheet classification of financial instruments that include attributes of both debt and equity (i.e., hybrid financial instruments) affects the stock price judgments of buy-side financial analysts. Financial economics research documents that, on average, firms announcing an offering of additional common equity securities experience a decline in the market value of their outstanding common stock. In contrast, firms financing with straight debt generally do not experience a decline in common stock market value (see Smith [1986] for a summary). Psychology research suggests that, when making

Abstract: I examine the multifaceted aspects of financial system design, focusing on the real effects of this design. My exploration of the key issues and my review of the related literature pertain to three dimensions of financial system design: (i) the permissible scope of activities for banks and other depository financial intermediaries, (ii) the regulations dictating the structure of the banking industry, and (iii) information disclosure requirements in the financial market. I address a diverse set of issues such as borrowers' choices of financing source and how these are affected by financial system design, the impact of financial system design on the capital structure and corporate control decisions of nonfinancial firms, the relationship between financial system architecture and the liability claims of banks, the issues surrounding the desired permissible scope of banking and bank industry structure, and the overall design of a financial system.

Abstract: Marketing and financial services: - an overview The financial services environment The Financial Services Customer Segmenting& Targeting the Financial Services Marketplace Information for marketing financial services Relationship Marketing in Financial Services Building and sustaining the financial services brand Creating value: the financial services product Pricing and Value in Financial Services Distributing Financial Services Communicating in the Marketing of Financial Services Marketing Strategies in Financial Services

Abstract: Discussion of “Oil and the Macroeconomy: Lessons for Monetary Policy” It’s a pleasure to discuss this thoughtful and comprehensive report on the macroeconomic implications of oil price movements. Even though we are no longer faced with sky-high oil prices, the issues discussed here remain important and policy relevant. It is hard to believe that oil prices will not go up again sometime in the future, so it is vital that we learn from the last episode, both about how the economy is likely to be affected and how monetary policy should respond. Perhaps not surprisingly, most of my discussion relates to the latter topic, namely the Fed’s policy response to the swings in oil prices over the last seven years. But I would like to start by commenting on the paper’s discussion of the relationship between the market price of oil and the value of oil in the ground. Thinking of this relationship in terms of Tobin’s q is an elegant and insightful contribution. As the authors point out, oil in the ground is like any other irreproducible asset, which should be described by Hotelling’s theory that the price of such an asset minus marginal cost increases at a rate equal to the prevailing interest rate. But oil above the ground has distinct characteristics. And a number of factors can cause its price to depart— for some time—from the value implied by Hotelling’s model. Thus, q—the ratio of the market I would like to thank Bharat Trehan, John Fernald, John Judd, John Williams, and Sam Zuckerman for assistance in preparing these remarks. Harris, Kasman, Shapiro, and West (2009)

Abstract: An exploration of the cross-sectional relationship between inflation and an array of indicators of financial market conditions, using time-averaged data covering several decades and a large number of countries.

Abstract: From the Publisher: Many research articles have appeared on applying neural network techniques to prediction in the various financial markets, but few publications offer practical guidance for implementing these techniques in the real world. This book provides a step-by-step system for setting up and trading a market using a neural network as the prediction engine. The techniques and methods presented in this book can be applied to any market, anywhere in the world, so this book will appeal to anyone who wants to trade or predict financial markets, specifically institutional traders (futures, commodities, stock, bonds, currencies, etc.), private investors and brokerage houses. It should also be of interest to students of financial market timing and Artificial Intelligence.

Abstract: Dramatic changes in information and telecommunications technologies have transformed U.S. financial markets in the 1980s and 1990s. This book examines the growth of mutual funds and derivatives markets and the decline of banks and explores implications of those developments for financial stability and regulatory policy. One of the book's central conclusions is that the current system of bank regulation is out of step with today's financial realities and needs to be substantially changed. Franklin Edwards asserts that the best way to increase the freedom of financial institutions to compete while making the financial system less vulnerable to excessive risk-taking by individual financial institutions is to adopt a system of collateralized banking. He shows how adopting such a system will result in a more stable financial system, both by reducing our reliance on government to maintain financial soundness and by enhancing the effectiveness of private markets in controlling institutional risk taking.

Abstract: In recent years, revolutionary changes in financial markets, combined with incidents such as Barings and Daiwa, have revived concerns about the adequacy of financial regulation. Historically, financial regulatory policy has been driven by the view that to maintain the health of the financial system you must maintain the health of individual institutions. Accordingly, if institutions are protected from failure through regulation of capital and prudential supervision, the viability of the system is ensured and the risks to the explicit or implied government safety nets that protect financial institutions are minimized. Indeed, recent discussions about how to deal with incidents such as Barings and Daiwa have centered on ways to extend the traditional safety and soundness regulation of individual institutions to incorporate an increased emphasis on risk management policies and procedures. In light of ongoing changes in financial markets, however, extending the traditional approach to financial market regulation may not work. Extending the traditional approach may be too costly and difficult, especially for large, globally active institutions, because of the complexities of many new activities and financial instruments. Given these difficulties, it seems appropriate to ask whether there is an alternative regulatory approach to promoting financial stability and protecting government safety nets without sacrificing efficiency or stifling innovation. My comments today are designed to provide some thoughts on possible alternatives. Two changes in emphasis to the regulatory system are discussed. First, instead of regulating to make institutions fail-safe, an alternative approach is to strengthen the stability of the financial system by designing procedures that prevent large interbank exposures in the payments system and interbank deposits. Second, although moral hazard problems can be contained through traditional regulatory approaches, an alternative is to require those institutions that engage in an expanding array of complex activities to give up direct access to government safety nets in return for reduced regulation and oversight. By further emphasizing these elements within the regulatory system over expanded micromanagement, individual institutions could be permitted to engage in new activities and sometimes to fail because financial stability would be less threatened by the failure of an individual bank-large or small, global or domestic. At the same time, the cost of protecting the safety nets would be better confined because traditional regulation would focus on traditional banks that choose to have access to the safety nets. THE CHANGING FINANCIAL SYSTEM In recent years, financial markets around the world have experienced significant structural changes. Some of the more important changes are the growing importance of capital markets in credit intermediation, the emergence of markets for intermediating risks, changes in the activities and risk profiles of financial institutions, and the increasingly global nature of financial intermediation. These changes have been spurred largely by a technological revolution that has reduced the costs of information gathering, processing, and transmission. As this information revolution continues, there is little doubt that the changes in financial markets will also continue. More than ever before, banks face greater competition from other financial institutions. Many businesses are turning away from banks and other depository institutions and directly toward capital markets and nonbank intermediaries for their funding needs. In the United States, for example, banks have lost market share in the short-term lending market to commercial paper and finance company loans. Over the past 25 years, bank loans as a share of short-term debt on the books of nonfinancial corporations have fallen from about 80 percent to about 50 percent. In addition, corporations have greater access to other sources of finance, such as medium-term note facilities and junk bonds. …

Abstract: The financial derivatives market evolved rapidly in the 1980s in response to the deregulation of financial markets and financial innovation. Encompassing futures, options, currency swaps, and interest rate swaps, this market has grown to a value of more than $8 trillion in outstanding contracts. While these financial innovations have assisted business enterprises in hedging risk, they have also created conditions for heightened financial fragility on an international scale. The rapid growth of the derivatives market has been accompanied by a lag in instituting regulatory controls that would limit the destabilizing impact of these new financial innovations. Since many derivatives involve cross-border trading, the derivatives market has led to increased international financial fragility and the attendant need for greater supranational governance of derivatives. To explore these themes, I will use a monetary theory of production provided by institutionalist economic theory.

Abstract: For over 20 years until the early 1990s Zambia had entailed extensive government ownership and administrative controls over markets, including financial and banking markets. Interventionist policies, combined with a steep fall in the external terms of trade, led to economic decline. A major programme of market oriented economic reforms was adopted in the early 1990s which included financial sector reforms.

Abstract: Examines the development of the Spanish non‐residential property market over the last 20 years and in particular since the Boyer reform of 1985. Explores the legal framework of property interests to demonstrate that the legal prerequisites of a mature market form are now in place. Places legal change in the context of economic pressures for the creation of a modern property investment market. Considers the professional support for transacting property and the nature of the urban planning regime as factors which constrain and mould property market activity, but which may ultimately be transformed by it. Presents market data which show that the Spanish market has experienced one turn of the property cycle in its modern form. Demonstrates that it has proved highly susceptible to extremes of under‐ and over‐supply, arguably owing to the combined influence of an extremely open market and underdeveloped information provision.

Abstract: Research on the restructuring of financial markets in advanced industrial countries has focused primarily on the consequences of changing regulation and of concentration of capital and control. At an international geographic scale, these processes have produced strong financial centers and new outposts for capital transactions. They have also resulted in the reworking of domestic capital markets with significant consequences for the location of economic activities and access to financial services. In Mexico the financial infrastructure is ‘thin’ both with respect to the variety of institutions and in space. As a consequence of privatization and state innovation, a financial infrastructure is developing with important implications for access to capital by different segments of the economy and regions. This new financial infrastructure has a distinctly bimodal character. We describe the development of the Mexican financial infrastructure after financial market restructuring and speculate on the consequences...

Abstract: Financial markets have been transformed over the past two decades by three key developments. Firstly, the dismantling of barriers to international capital flows and the process of globalisation have resulted in a massively increased volume of cross-border financial transactions. Secondly, the functional integration of hitherto discrete areas of financial activity has led to the emergence of financial conglomerates combining traditional banking with securities operations and other non-bank business. Finally, financial innovation has produced a vast new market in derivative products that simply did not exist 15 years ago. These developments have no doubt raised the efficiency of financial markets. But they have also greatly complicated the task of regulatory authorities by increasing the potential for financial instability. The new global markets offer fresh channels for the transmission of financial shocks – both across borders and across market sectors. Furthermore, given the speed at which today’s markets react to adverse news, the response time available to regulators in an emergency is drastically reduced. Finally, because financial institutions can adjust their risk exposures so easily, it is no longer possible for market participants to assess the risk characteristics of those with whom they deal – a problem of opacity that undermines the capacity of financial institutions to police each other.

Abstract: Financial systems in many developing countries are said to be "financially repressed". The government intervenes heavily in the economy, segmenting financial markets, placing artificial ceilings on interest rates, and directly allocating credit among enterprises as it sees fit. The likely result is that the total amount of savings is lower than it should be, and the allocation of the total among its possible uses is inefficient. Disequilibrium in the financial markets generates rents which may be allocated through corruption. These distortions become severe when the real economy develops rapidly and profitable real investment opportunities abound, and yet the financial system lags behind.

Abstract: As international financial systems become increasingly integrated, the need to reform each country's system has become clear How to reform those systems is a hotly debated policy issue Much of this debate has centered on universal banking and the relationship between banks and financial markets These issues have particular importance for the European Union The stated goal of creating a single European financial system, without any barriers between member countries, implies a movement toward a single kind of financial system Should a market system be the goal or would a German-style intermediated system be more desirable? The theories that have been invoked to justify many of the moves to market-based systems are based on traditional neoclassical models Competition is thought to be desirable because it leads to increased efficiency Opening up new financial markets is thought to be desirable because it offers increased risk-sharing opportunities Much of the financial reform that has occurred in countries such as France and Spain has been concerned with moving away from a German-style intermediated system and allowing access to global financial markets In doing this they gain the advantages of cross-sectional risk sharing However, they may be losing the advantages of intertemporal smoothing and other forms of risk sharing It may be that this change is desirable, but it is important that the trade-off be properly understood before moving in this direction This is particularly true for Germany, where the potential already exists for a system of intertemporal smoothing Once the move to a market-based system has been made, it is much more difficult to regain the advantages of an intermediated system The authors identify two types of financial systems A market-based system promotes cross-sectional risk sharing An intermediary-based system promotes intertemporal risk smoothing Which system is best in a particular situation depends on the degree of homogeneity in each generation According to this view, it is not immediately clear that a move towards a single European financial system will lead to an improvement in welfare The parts of the European Union which currently have intermediary-based financial systems such as Germany, may well be made worse off because there will be disintermediation and possibilities for intertemporal smoothing may be eliminated The European Union is not the only place where the issue of financial integration is an important one The Clinton administration has made it a priority to encourage the Japanese to open their financial system and allow foreign competition Just as the analysis above suggests the German financial system might be damaged by the move towards a single market in the European Union, the effectiveness of the Japanese financial system might also be reduced by such a change Similarly, with NAFTA and the extension of this free trade zone to the rest of the Americas, it is again not immediately clear that moving towards a single financial market will benefit all countries

Abstract: Developing a successful strategy for investment in property is not easy. Research shows that abnormal returns, net of transactions costs, are difficult to achieve even though there is a widespread belief amongst valuers that property markets are inefficient. This is compounded by the fact that reliable data on property performance is usually difficult to obtain. It is possible, however, to make use of publicly available data and use it in a way which may help investors guide their decisions. If abnormal returns are difficult to achieve on a consistent basis then the use of methods of analysis which give the investor some competitive advantage are worth pursuing. Although high returns have been achieved in the Hong Kong commercial property market this does not imply that those returns are abnormal in an economic sense; they may merely offer compensation for risk. By extracting equilibrium market values and implied prices from market data this paper examines abnormal returns earned by Hong Kong commercial p...

Abstract: Intermediate macroeconomics textbooks introduce financial markets into the IS-LM analysis but typically as a beginning-of-period consideration. Here the financial market is introduced in an end-of-period model.

Abstract: Historically, the electric utility industry has been regarded as one of the most open industries in the United States in sharing information but their reputation is being challenged by competitive energy providers, the general public, regulators, and other stakeholders. As the prospect of competition among electricity power providers has increased in recent years, many utilities have been requesting that the data they submit to their utility regulatory commissions remain confidential. Withholding utility information from the public is likely to have serious and significant policy implications with respect to: (1) consumer education, the pursuit of truth, mutual respect among parties, and social cooperation; (2) the creation of a fair market for competitive energy services; (3) the regulatory balance; (4) regional and national assessments of energy-savings opportunities; (5) research and development; and (6) evaluations of utility programs, plans, and policies. In a telephone survey of all public utility commissions (PUCs) that regulate electric and gas utilities in the U.S., we found that almost all PUCs have received requests from utility companies for data to be filed as confidential, and confidential data filings appear to have increased (both in scope and in frequency) in those states where utility restructuring is being actively discussed.more » The most common types of data submitted as confidential by utilities dealt with specific customer data, market data, avoided costs, and utility costs.« less