A Research Of Financial Innovation Of Western Developed Countries

Since the 1970th, the activities of the world-wild financial innovation have not only promoted the whole changes of the financial deepening and the banking system, but also poured the persisting impetus of the economic development of these countries. It is of theoretical and practical importance to make a systemic analysis and research on the financial innovation spreading to the whole world. The financial innovation researches not only stand for the latest frontier of contemporary financial theory and practice, but also reflect the latest and strongest need of the theory and practice of the international financial markets. Innovation not only makes the financial industrial itself change with the every passing day, but let the whole social economy remold itself as well. Recently, researches on the topic of financial innovation have left far behind the development of those in other countries. On one hand, we are lack of the systemic research materials on the financial innovation; on the other hand, we are lack of the systemic research on the classification and mechanism of the formation and the economic impacts. This paper mainly makes a tentative analysis on the above-mentioned aspects. In a broad sense, financial innovation refers to all the financial activities. They take promoting the mobility, security, productiveness and timeliness of the monetary assets for their aims. They take the invention of the new financial products, skills and services for the characteristics. They take the spread of the research exploitation, general adoption of the market principle and their spread as the characteristics. They take the financial itself, the banking institutions and the non-banking institution as the main body and take the financial liberalization, financial security, financial internationalization, computerizing financial services as their sign in the narrow sense, while financial innovation refers to the innovation of the financial instruments or the products. Classification is the foundation for the further analysis and research of the financial innovation, and it is the basic requirements for clearing off the logic of the financial innovation. Different criteria of classification give rise to different classifications, while there are no absolute boundaries among the different criteria of the classifications. According to the function of the financial intermediary, financial innovation includes the innovation of passing the risk, the innovation of the mobility promotion, the invention and the innovation of the credit and the debt, the invention and the innovation of the capital stock. According to the classification of the principal parts of the financial innovation, financial innovation includes the government-dominant financial innovation and the market-dominant financial innovation. According to the source of the drive of the financial innovation, financial innovation include binding and abduction financial innovation, demand pull financial innovation, technological drive financial innovation, governing elusion financial innovation and competition inspire financial innovation. According to the market characteristics of the financial innovation, financial innovation includes financial innovations facing money market, facing capital market and facing both the two markets. According to the level characteristics of the financial innovation, financial innovation includes base money tool innovation, debt tool innovation, stock ownership tool innovation, deriving debt tool innovation, deriving stock ownership tool innovation and the mixture of the debt and stock ownership tool innovation. There are many theory genres on the financial innovations nowadays. Among them there are some representatives, such as Serbia's theory of the binding and abduction, Kane's elusion, institutional school's theory of financial innovation, CIO and Incense's theory of transaction of costs and so on.From the angle of the contemporary economic development history, the background of financial innovations is mainly reflected in three aspects. Firstly, after the Second World War, international capital mobility and the European currency market established and made a great progress. These give a direct influence on the European countries'economic systems, and the strong financial countries----American and British banking systems. Secondly, the oil crisis happened in the 1970s and the thereon the circumfluence of the oil dollars. These make the world economic market construction have a great change, and bring out the imbalance in world payments, which bring about the financial innovation as the representative of the fluctuating interest rates, monetary forward transactions, financial futures. These take the development of the European monetary market and capital market as the purposes. Thirdly, international debt crisis broke out in the 1980s. It pricks up the insecurity of the international financial and brings out the birth of many new financing instruments and methods. If the events happening in the process of the world economic development are the primary background or the indirect reasons, we can say the direct reasons of the financial innovation are the wild use of modern information in the financial field and the reform of the financial supervisory management. New technology revolution brings on the financial operation innovation directly and urges the traditional banking operation innovation and brings out new financial instruments. This carves out the financial market step by step. Although the financial innovations have the same or the similar microscopically representations, different countries and areas have their own characteristics, mechanism and impacts. Taking the America, Britain, and Japan as the example, American financial innovation takes the breaking-out of the market classification as the basic impetus, the mutual fund and security as the dominant strength, the changes of the financial intermediary properties asthe main manifestation, the government insurance as the main foundation. It stimulates the vigor for American financial system, but also brings out the new insecurity factors for the American financial constructions. It not only promotes the productiveness of the financial transaction, but also takes a shadow for the new risks for the financial system. The basic logic of the British financial innovations is as follows. The opening of the international operation and the policy of the government privatization bring out the reconstruction of the financial system. High-rate overseas banking deposit provides the advantage conditions for the monetary and capital market. Individual assets construction's slant from house to the financial capitals provides the new impetus for the financial innovation. Britain's financial innovation doesn't get over that of Americans no matter the deepness and the wildness, but British'financial innovation taking the security as the main body does the service of the British economy and the world economy; it also becomes the main source of income for Britain's economy. Japan's financial innovation has the characteristics as the follows. It takes the inner economic factors as the direct impetus, the governing the reconstruction as the basic requirements, the debt instruments innovation as the main characteristics. It stimulates its banking operation's vigor, promoting the polarization of the Japan's banking system. and giving he higher demands for the mechanism. The financial crisis happening in the 1930s, deriving from the western economy crisis makes the western countries enforce the financial governing. But the serious inflation makes the rates rise quickly. This makes the changes costs rise and these countries strengthen the financial management through the financial innovation. Western countries'national banking operation developed rapidly under this circumstance. The banking operation innovations are reflected in the debt innovation, capital innovation, and middle operation innovation. Banking debt innovation takes the shiftiness as the main characteristics. It keeps unity of the current deposit's shiftiness and interestness. It broadens the deposit deriving functions, makes the western commercial banks managing theory take a quantum jump. Bank capital innovation mainly reflects in the consuming credit, housing loan and bank group loan. Credit cards as a new financial instrument makes an important influence on the broadening the capital operations. There is a middle operation besides the capital debt operations. Their main bodies are the credit operation and rent operation. Since the 1990th, net banking operations and online banking operations developed flourishingly. It makes the banking operation develop quickly, efficiency increasing, cost lowering. It becomes an innovation of the banking manage mold step by step. Financial innovations are the creative changes and the taping activities on the institutional installation, operation kinds, market construction, and the arrangement to pursuit opportunities or breaking out governing. It includes the financial operation innovation, financial market innovation and the financial system innovation. The financial operation innovation is the key, and the financial liberalization deriving from the financial system provides the good environment for the financial operation innovation and the financial market innovation from the microscopes. The relationships among between the financial innovation and the financial governing, financial deepening, financial liberalization, financial risks must be dealt with properly in order to bring into the best play on the financial innovation. There is the unity between financial innovation and financial government. Financial innovation is the result of the financial deepening, and it will deepen the grade of the financial deepening. In the meanwhile, financial innovation gives a loose effect of the financial governing. It brings out the appearance of the financial liberalization. And financial liberalization provides the free environment for the further development of the financial innovation. In a broad level, financial innovation has the function of shifting and scattering the financial risks, and even it can lower the financial risks on a certain degree. However, on this presses, new...