Is financial innovation a still relevant issue?

Paola Bongini, University of Milan-Bicocca
Luisa Anderloni, Università Statale di Milano

Abstract

In this study we investigate the effects of financial innovation on performance and asset growth for a sample of EU large banks. The novel contribution of this study is the use of a unique dataset that identifies banks’ attitude towards innovation across time and the level of information conveyed to market participants in order to understand: a) to what extent, in recent years, banks have focused their attention on financial innovation; b) to what extent an innovating attitude translates into greater asset growth and higher profitability;