I study the limit of a large random economy, where a set of consumers invests in financial instruments engineered by banks, in order to optimize their future consumption. This exercise shows that, even in the ideal case of perfect competition, where full information is available to all market participants, the equilibrium develops a marked vulnerability (or susceptibility) to market imperfectio...

Financial markets represent one of the most complex environments for business and there are a lot of types of external factors which impact their dynamics. The recent financial turbulence materialized by the global financial crisis 2008-2009 and the European sovereign debt crisis (2010-2012) made serious pressure on financial markets that proved their fragility and sensitivity in a different ma...

The widespread use of innovative financial transactions in international financial market in recent years is primarily driven by the need for greater financial risk management by businesses and financial investors. Many related factors have contributed to the needs of business for more sophisticated financial instruments, as well as to the financial world’s technological ability to meet that de...

Both auditors and credit rating agencies have been linked to financial scandals in recent history. In the early 2000’s, several of the “big five” accounting firms issued favorable audit opinions to public companies employing deceptive accounting practices. Some of these companies even committed outright fraud. Once the investing public caught wind of these accounting irregularities, it lost tru...