Preface: recent developments in financial modelling and risk management

Roy Cerqueti, Rita Laura D'Ecclesia, Susanna Levantesi
2021 Annals of Operations Research  
In the last decade, a wide range of innovative financial instruments has taken by storm the financial markets. In 2015 for instance, the European Commission (EC) introduced the definition of "innovative financial instruments" as instruments that are complementary to grants or subsidies and as part of a move towards a smarter "funding mix". Loans, equity and quasi-equity instrument and guarantees are considered as a particularly effective way to increase and enhance the impact of EU funding
more » ... compared to the traditional grantbased system (EC, 2015), therefore, they represent a way to further promote a more responsible, result-oriented use of European funds by the corporate world. Cryptocurrencies can actually be considered electronic funding while virtual payment services are showing an impressive growth pattern. Such phenomenon is certainly due to a rapidly growing public interest that creates strong market demand and limits supply. Thousands of developers and dozens of companies are widely involved both in the creation and the use of BlockChain technology. Banks have invested widely in this technology. Research firms expect the user base to grow at an average annual rate of 17.5% over the next decade, with up to 28.1 billion IoT installed devices by 2020, and revenues exceeding 7 trillion USD the same year (2020). The "new paradigm" for payment systems will bring people to rent a house in just a few minutes: sign the renting contract, perform the payment and get the (digital) keys on their mobile phone. The willingness and the necessity to implement a more responsible financial market and/or a sustainable economy have strongly affected the dynamics of commodity markets in the last decade. Energy and commodities markets as a whole have represented a key investment tool. The potential of innovative instruments and the impact of responsible standards ought to be fully exploited while their influence on the markets must be properly and precisely assessed. In addition, an update of portfolio selections methods, an adequate tool for risk measurement and a selection of efficient risk management strategies are all top priorities. Most scholars in the field have been studying and modelling the dynamics of new
doi:10.1007/s10479-021-03958-9 fatcat:hhn5u5i55naddae7tysvq6e5im