The rise of financial technology (FinTech) engenders novel business models through integrating financial services and information and communication technologies (ICT). Digital currencies and payments, data mining, and other FinTech applications threaten to radically overhaul the financial sector. This article argues that, while we are becoming aware of how technology giants such as Apple Inc. are making inroads into financial services, we need to become more sensitive to how financial incumbents mimick ICT firms while aiming to neutralize the FinTech challenge. Practices from Silicon Valley are spilling over into ‘traditional’ finance through a process we dub Appleization. We illustrate how incumbents aim to remain indispensable amidst rapid digitization. Mimicking tech strategies, financial incumbents resort to transforming legacy ICT systems into integrated platforms, cultivating entrepreneurial ecosystems where startups are ‘free’ to compete whilst effectively being locked into the incumbent's orbit. We illustrate this by comparing Apple's business features (locking-in developers, customers and state into a hybrid business model based on a synergy between hardware, software and data-driven platform components) with emerging practices in the financial industry. Our analogy suggests that the Appleization of finance might radically transform, yet not undercut the oligopolistic position of financial incumbents.

A new literature on housing and financialization has emerged in recent years, but scholars have yet to examine how political actors shape national trajectories of housing financialization. In this article, we address this shortcoming by examining the cases of Russia and Poland in the 1990-2018 period. We argue that in both contexts political elites implemented a radical market-oriented reshaping of housing finance. However, by pursuing distinct statecraft strategies and modes of integrating the domestic economy into global markets, Russian and Polish political elites created two divergent trajectories of housing financialization. Russian political elites pursued patrimonial statecraft strategies and a mode of global economic integration based on raw material exports. The Putin administration channeled revenues from raw material exports into the securitization-based housing finance system and used this infrastructure as an instrument of hegemonic power. In doing so, the Russian government shielded homeowners from exposure to financial risk. In contrast, Polish political elites pursued liberal statecraft strategies and a mode of global economic integration based on foreign capital inflows. Polish political parties therefore enabled foreign banks to dominate the housing finance system and sell foreign currency mortgages, which exposed homeowners to considerable financial risk. In light of these findings we call for further research into the political factors that shape the process of housing financialization, both in the post-socialist space and beyond.

This article explores the complex dynamics of financial innovation in early modern times, challenging linear models of temporal and spatial divisions that tend to shape our understanding of the evolution of financial systems. It supports the idea that innovation should be viewed as a non-linear and contextual process, involving diverse stakeholders and characterised by interactions and unexpected occurrences. The study focuses on the dissemination and trajectories of financial innovations, specifically the bill of exchange and its variation, the ricorsa, as well as the transferability and negotiability of commercial paper. It does so by investigating the interactions and exchanges between merchants and bankers from diverse backgrounds during the sixteenth-century Lyon fairs, using the archival records of one of the first Italian banks in Lyon (Salviati). The study reveals the mutual influence and acculturation among these agents and challenges the compartmentalisation of financial expertise. Through an analysis of transactions recorded in the Salviati bank's ledgers, the article highlights previously unknown uses of commercial paper by Southern merchant communities and discusses the factors that may have hindered the full-scale development of endorsement and discount in the Lyon trading networks, despite their potential benefits. The results provide insights into the intricate nature of financial innovation and the influence of structural and cultural factors on its development.

Since the late seventeenth century, trust offices (administratiekantoren) that repackage securities have been a central institution in Dutch finance. Their basic form and functioning have remained largely the same, but over time, the repackaging has come to serve different purposes. Originally set up for administrative convenience, they helped to create liquidity, notably for foreign securities. From the 1930s, their primary purpose became to shield directors of large corporations from shareholder influence and hostile takeover threats. Subsequently, the trust offices evolved from general-purpose administrative units into dedicated foundations closely tied to individual companies and increasingly popular with foreign corporations as cheap anti-takeover devices. Their reincarnation as foundations also turned them into vehicles for the tax-efficient routing of international revenue flows via the Netherlands.

Innovations in the world of alternative finance such as online consumer lending, fund-raising platforms and cryptocurrencies are proceeding apace. In this article, we examine three historical case studies of newly emerged non-bank financial markets and discuss the possible implications for today's alternative finance markets. The first insight is that the private sector can generally be counted on to meet previously unmet needs. Moneylenders filled a gap unaddressed by the banking system of the day. Junior market IPOs provided access to funds for smaller companies that might otherwise have struggled to raise external finance. Private currencies replaced sovereign coins in transactions at various points in history. The second insight, however, is that new financial markets and instruments eventually attract the attention of regulators. Finally, these examples are a warning to industry not to take for granted that an initially laissez-faire regulatory regime precludes a stronger response at some point in the future. In all three cases, tougher regulation – in some cases even to the point of shutting down the products and markets concerned – arrived after long periods of observation and deliberation by the state.

Although the legality of equity-based crowdfunding was determined from a judicial point of view in the “first crowdfunding financing case” in 2015, there is no formal law, regulation, or rule released to regulate the crowdfunding financing. From a micro-perspective, determining the nature and workings of equity-based crowdfunding are two preconditions for determining the legal framework for and supervision of equity-based crowdfunding. The “Open, Public, Small-sum” characteristics defined the nature of public offering to the equity-based crowdfunding; therefore, it should be distinguished from private equity financing as a different category of online equity financing. Based on the original purpose of “financing facility” and the nature of “grassroots finance,” fundraisers shall enjoy exemptions on small sums, and the threshold of investors shall also be appropriately restricted, while the intermediary platform shall be the regulatory focus. From a macro point of view, the supervision of equity-based crowdfunding should seek a balance between “financial innovation” and “risk control.” Equity-based crowdfunding should not simply be considered a financing method. Rather, its positive effects on mass entrepreneurship and innovation should be emphasized so as to make it a particularly important “booster” to promote economic and social development.

This article discusses the use of private promissory notes in the sixteenth-century commercial metropolis of Antwerp. Students of financial history tend to look for first instances of financial techniques and institutions such as bills of exchange, share trading, sovereign debt and banks. However, financial innovation can also be found in the piecemeal adaptation of an older, existing technique, institution or instrument as the result of changes in the market and of demands exerted by particular groups within that economy. The outcome of this process is determined by the structure of the economy in question, its institutional arrangements and the willingness of authorities to adapt the rules.

Indebted cities were a widespread phenomenon during the Ancien Régime. However, some found ways to innovate the management of their municipal debt, whilst others fell prey to over-indebtedness or default. In this article we have left the success stories aside and focused on the latter. Using early modern Antwerp as a case study, we have disentangled the underlying mechanisms that ultimately lead to over-indebtedness and (in some cases) default. Whilst the economic climate and the relationship between city and state have been rightly identified as major factors in the previous literature, our contribution brings another element to the table, namely, the inflexibility of long-established rent arrangements and the entanglement between the ruling elite and the rentiers. We show that there was a strong overlap between both groups, which had a huge impact on the financial policy of cities during the early modern period.

The shadow banking system is the one that conducts credit, maturity and liquidity transformation outside regular banking mechanisms. Chinese practices largely fit into this concept. However, unlike their foreign peers, Chinese shadow banking institutions have been intertwined into a complex whole and have achieved credit intermediation usually through wealth management products, often using the problematic asset-pool model. They are also substantially influenced by the unique political economic dynamics in China, such as the rigid financial licensing regime and credit policy control. Both the supply and demand ends of funding have provided those activities with new features, for instance, the P2P lending marketplaces and local government financing vehicles. Chinese government agencies have interplayed responsively and proactively with the market via rulemaking and enforcement, in particular recently, with the aim to fix loopholes, level the playing field and limit regulatory arbitrage. However, further efforts are imperative in order to develop moderate and appropriate regulation and draw clearer legal boundaries.

A recent article in The Economist magazine divided economists into “poets” and “plumbers,” the former articulating radical new visions of the field and the latter patiently installing the infrastructure needed to implement those visions. Bob Shiller is the rare economist who is both poet and plumber. Not only that, he is also entrepreneur and pundit. His work has fundamentally changed the theory, econometrics, practice, and popular understanding of finance.

Starting in the late 1970's, Bob boldly challenged the prevailing orthodoxy of financial economics. He showed that financial asset prices often deviate substantially from the levels predicted by simple efficient-markets models, and he developed new empirical methods to measure these price deviations. In the early 1980's, Bob went on to argue that economists need a much more detailed understanding of investor psychology if they are to understand asset price movements. He pioneered the emerging field of behavioral economics and its most successful branch, behavioral finance. At the end of the century, Bob articulated his vision of finance in a wildly successful popular book, Irrational Exuberance. He became so well known that TIAA-CREF asked him to appear in a series of full-page advertisements in the popular press.

Although Bob does not believe that investors use financial markets in a perfectly rational manner, he does believe that these markets offer great possibilities to improve the human condition. His recent work asks how existing financial markets can be used, and new financial markets can be designed, to improve the sharing of risks across groups of people in different regions, countries, and occupations. He has explored risk-sharing possibilities not only in journal articles, but also in business ventures and a 2003 book, The New Financial Order: Risk in the 21st Century.

It was a great privilege for me to interview Bob Shiller. Bob's arrival at Yale when I was a Ph.D. student there set the course of my career as an economist. Bob reinvigorated the Yale tradition of macroeconomics, with its emphasis on the central role of financial markets in the macroeconomy and its idealism about the possibility of improving macroeconomic outcomes. First as a thesis adviser, then as a coauthor, mentor, and friend, Bob showed me how to contribute to this tradition.

The interview took place at the 2003 annual meetings of the Allied Social Science Associations in Washington, D.C. We met in a hotel suite, ate a room service meal, and had the enjoyable conversation that is reproduced below.