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Open Access Journal Article

Financial Innovation and Market Efficiency

by Sarah Johnson 1,*
1
Sarah Johnson
*
Author to whom correspondence should be addressed.
EFRL  2021 3(2):23; https://doi.org/10.69610/j.efrl.20211021
Received: 20 August 2021 / Accepted: 24 September 2021 / Published Online: 21 October 2021
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Abstract

The paper explores the intricate relationship between financial innovation and market efficiency. Financial innovation refers to the development and introduction of new financial products, services, and technologies that alter the structure and function of the financial system. Market efficiency, on the other hand, is a measure of how well a financial market performs in allocating capital and providing liquidity. This study delves into the impact of financial innovation on market efficiency by examining various dimensions such as information dissemination, transaction costs, and risk management. It is argued that while financial innovation can enhance market efficiency through improved access to information and lower transaction costs, it can also lead to increased volatility and systemic risks. The paper concludes with a discussion on the regulatory challenges posed by financial innovation and the need for a balanced approach to foster innovation while maintaining market stability.

Keywords: Financial Innovation; Market Efficiency; Transaction Costs; Risk Management; Regulatory Challenges.;
Copyright: © 2021 by Johnson. This is an open-access article distributed under the terms of the Creative Commons Attribution License (CC BY) (Creative Commons Attribution 4.0 International License). The use, distribution or reproduction in other forums is permitted, provided the original author(s) or licensor are credited and that the original publication in this journal is cited, in accordance with accepted academic practice. No use, distribution or reproduction is permitted which does not comply with these terms.
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APA Style
Johnson, S. (2021). Financial Innovation and Market Efficiency. Economics and Finance Research Letters, 3(2), 23. doi:10.69610/j.efrl.20211021
ACS Style
Johnson, S. Financial Innovation and Market Efficiency. Economics and Finance Research Letters, 2021, 3, 23. doi:10.69610/j.efrl.20211021
AMA Style
Johnson S. Financial Innovation and Market Efficiency. Economics and Finance Research Letters; 2021, 3(2):23. doi:10.69610/j.efrl.20211021
Chicago/Turabian Style
Johnson, Sarah 2021. "Financial Innovation and Market Efficiency" Economics and Finance Research Letters 3, no.2:23. doi:10.69610/j.efrl.20211021

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ACS Style
Johnson, S. Financial Innovation and Market Efficiency. Economics and Finance Research Letters, 2021, 3, 23. doi:10.69610/j.efrl.20211021
AMA Style
Johnson S. Financial Innovation and Market Efficiency. Economics and Finance Research Letters; 2021, 3(2):23. doi:10.69610/j.efrl.20211021
Chicago/Turabian Style
Johnson, Sarah 2021. "Financial Innovation and Market Efficiency" Economics and Finance Research Letters 3, no.2:23. doi:10.69610/j.efrl.20211021
APA style
Johnson, S. (2021). Financial Innovation and Market Efficiency. Economics and Finance Research Letters, 3(2), 23. doi:10.69610/j.efrl.20211021

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