Time: 13:00-15:00 (UK Time), Wednesday, 2 February 2022
Presenter: Dr. Athina Petropoulou, SOAS University of London
Co-author: Professor Victor Murinde, SOAS University of London

Chair: Professor Victor Murinde, SOAS University of London
Online venue: Click here to join the seminar on Microsoft Teams (For any inquiry about how to join the online seminar, please contact Dr. Meng Xie: xm1@soas.ac.uk

Abstract
The FinTech revolution is exploiting recent technological advances to offer novel applications to the entire spectrum of the financial services value chain. However, the revolution is in its early stages and its impact on the behaviour of economic agents, such as households, is not well known. In this paper, we estimate a flow of funds model for the household sector within the Almost Ideal Demand System (AIDS) framework and examine the impact of financial innovation on the demand for financial assets and on the dynamics of substitution between the assets. We focus on a sample of OECD countries, which constitute the engine of the global economy and provide the largest contributions to growth in recent years, namely UK, EU, US, Japan, China and Australia: the US contributes 20.90% of world GDP, EU 15.53%, China 14.09%, Japan 5.03%, UK 2.90% and Australia 1.45%. We seek to make at least three main contributions. First, using a system of asset demand equations, we offer a new interpretation of the demand for financial assets by households in the context of financial innovation. Second, we impose cross-equation restrictions to uncover substitution effects between FinTech, money and other financial assets. Third, we assess the impact of Covid-19 on household portfolio preferences. Overall, this research sheds light on the impact of financial innovation, specifically FinTech, on household portfolio behaviour in the large economies which shape global economic developments.

Presenter

Dr. Athina Petropoulou is a post-doctoral Research Fellow in the Centre for Global Finance at SOAS University of London. Athina joined CGF in 2020 under the AXA Chair in Global Finance. She joined us from the University of Bath. Her core research interests lie in the areas of banking, where she investigates credit risk, liquidity risk, efficiency and competition across alternative banking models (e.g., community banks). Her other research interests also include finance and financial econometrics and she has been involved in research projects at the University of Bath and the University of Kent. Her research work has been presented at leading international academic conferences such as IFABS and INFINITI among others.