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On the Economic Effect of Financial Innovation
HU Hai-feng, LUO Hui-liang
2009, (6):
41-47.
DOI:
Financial innovation is a double-edged sword.On the one hand,it may have the positive effect of raising the efficiency,enriching the financial instrument,promoting unification of the financial market,contributing to financial reform and promoting economic development.On the other hand,it may also leave the negative effect of reducing stability of the financial system,increasing the risk of financial system,lowering financial monitoring capacity,dysfunctioning of the monetary policy,and endangering the infection of financial crisis.Therefore,it is necessary that world-wide efforts be made to expand international cooperation and properly deal with the negative effect of financial innovation by means of strengthening financial monitoring,establishing crisis early warning system and raising the effectiveness of monetary policies.
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