The topic of this conference epitomizes the interplay of culture and economics. The past two decades have seen the emergence of financial markets for new assets, like options, futures and many other derivatives, and of new financial institutions like investment and mutual funds. In combination with the internationalization and deregulation of the banking and finance sectors in many countries, these developments are beginning to shape a new system of financial institutions. This conference gathers contributions of economic historians, of economists and of law scholars which shed light on these institutional changes. The future role of banks and financial markets is the central theme of these papers.
Financial markets enable firms to raise funds for their capital investments.
In this context the market for risk-taking capital is of special interest. The characteristic transaction in this market is that capital owners receive claims on the future surplus from the firm's operations in exchange for capital funds. The value of the claims depends largely upon the policy of the firm's management. The solutions which can be found for this problem are fundamentally important for the functioning of financial markets. The impact of information asymmetry upon market transactions has become the basis of a new branch of theory.