By David Blair for the China Daily/European Weekly.
Nobel-winning economist Robert C. Merton says financial innovation is key to the future of Asia.
The financial crisis led to a loss of trust in providers, regulators, and financial innovation among consumers, Merton observes. Some have proposed technology can stand in for trust, but he says fintech cannot create trust or succeed without it. Two things, however, can substitute for trust: verification and transparency. Some forms of fintech can provide verification, but financial advice tends to be opaque rather than transparent. Merton also discusses data showing retail investors as less satisfied with cost disclosures and performance from active portfolio managers than institutional investors.
Slide presentation at the UMASS Center for International Securities and Derivatives Markets
Slide deck from presentation on New Developments in Long-Term Asset Management NBER meeting in London.
Slide deck from presentation, Derivatives: The State of the Art, at New York University.
The Business Times, p.10-11.
Robert Merton talks to Vikram Khanna about financial innovation, risk and crises.