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Published VersionCC BY V4.0, Open Access
Journal article
Disproportionate Safety Preference and the Innovation of Fintech Shadow Banking
Theoretical Economics Letters, Vol.12(3), pp.629-635
2022
Abstract
There has been a dramatic shift in financial intermediation in the last 10-15 years from traditional banks to shadow banks (non-depository institutions that rely on originate-to-distribute lending model). We link this rise to an emerging literature that shows that certain and uncertain utility functions are different with a disproportionate preference for certainty. We show that such a preference plays a role in diverting lending away from the traditional banking model to the shadow banking model. Furthermore, a low interest-rate environment emerges as the key contributing factor in the dramatic rise of shadow banking.
Details
- Title
- Disproportionate Safety Preference and the Innovation of Fintech Shadow Banking
- Authors
- Hammad Siddiqi (Corresponding Author) - University of the Sunshine Coast, Queensland, School of Business and Creative Industries
- Publication details
- Theoretical Economics Letters, Vol.12(3), pp.629-635
- Publisher
- Scientific Research Publishing, Inc.
- Date published
- 2022
- DOI
- 10.4236/tel.2022.123035
- ISSN
- 2162-2086; 2162-2078
- Copyright note
- Copyright © 2022 by authors and Scientific Research Publishing Inc. This work and the related PDF file are licensed under a Creative Commons Attribution 4.0 International License.
- Organisation Unit
- School of Business and Creative Industries; University of the Sunshine Coast, Queensland
- Language
- English
- Record Identifier
- 99645779202621
- Output Type
- Journal article
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