Franklin Allen and Glenn Yago

Financing the Future: From History to Housing, Health, and Environmental Innovation By Franklin Allen and Glenn Yago

Financial innovation can drive social, economic, and environmental change, transforming ideas into new technologies, industries, and jobs. But when it is misunderstood or mismanaged, the consequences can be severe. In this practical, accessible book, two leading experts explain how sophisticated capital structures can enable companies and individuals to raise funding in larger amounts, for longer terms, and at lower cost—accomplishing tasks that would otherwise be impossible.

The authors recount the history and basic principles of financial innovation, showing how new instruments have evolved, and how they have been used and misused. They thoroughly demystify complex capital structures, offering a practical toolbox for entrepreneurs, corporate executives, and policymakers.

What the Book Covers:

The current role of financial innovation in capitalizing businesses, industries, breakthrough technologies, housing solutions, medical treatments, and environmental projects
Distinguishing genuine innovation from dangerous copycats
Crafting sustainable financial innovations that add value and manage risk
Selecting the right instruments and structures—and making the most of them
Finding new and better ways to promote entrepreneurship and advance social goals
Using the power of finance to protect natural resources and alleviate global poverty
Lessons learned: essential insights for stabilizing the economy and avoiding pitfalls

This is the first in a new series of books on financial innovation, published through a collaboration between Wharton School Publishing and the Milken Institute. Future titles will focus on specific policy areas such as housing and medical research.

Praise for the Book:

"Allen and Yago demonstrate clearly the importance of the interaction of theory and experience in explaining the evolution of financial innovations." — Myron S. Scholes, Nobel Laureate in Economics, 1997

"Despite its role in the recent economic crisis, financial innovation, wisely used, can play a crucial role in solving some of the world's most pressing problems, particularly by delivering sustainable growth and economic development. Allen and Yago's compelling, contrarian analysis punctures the current gloom about finance, and shows how its creativity can make a huge, positive difference." — Matthew Bishop, New York Bureau Chief, The Economist

"This book provides a clear and concise history of financial innovation as an engine for growth in various fields—an often ignored or misunderstood topic. A must-read in these times." — Richard L. Sandor, Chairman and Founder, Chicago Climate Exchange

"The right book at the right time. With facts and analyses, Allen and Yago restore the concept of financial innovation to its rightful place: a medium by which long-standing problems of social, economic, and environmental concern have been addressed, sometimes solved." — Lewis S. Ranieri, Ranieri Partners LLC

"From housing to microfinance to drug development, the authors prove in plain English the vital role creative finance played in building America and why stifling innovation poses a risk to our financial future." — Brian Sullivan, Fox Business

First published March 3, 2010

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Financing the Future: Market-Based Innovations for Growth

Financing the Future: Market-Based Innovations for Growth

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