Dear Prof. Fields,
Since Econophysics and Engineering Physics are my research areas along with Banking Asset Markets and Stock Markets and Digital Asset Markets I am going to give you a yes and no kind of answer. However before that I would request you to take a look at my coauthored paper on Banking Sector Assets on my RG page. When you say liquidity preference theory there is a always a factorisation and classification issue which is whether you are referring to liquidity preference of bank managers or liquidity preference of borrowers or liquidity preference of depositors, the three will in a disaggregated analysis give three different results. The liquidity in general which is measured by the money supply function of banks and which depends on Reserve Ratios at the minimum scale or at the average scale depending upon which country you are talking about (banking system), results in the endogeneity of the money supply in the economy. But money demand depends on liquidity preference in a function where banks especially commercial banks play a much less important role. You can also refer to my coauthored paper on Mathematical Statistical Stock Pricing on my RG page. I hope this is helpful. SKM QC
Dear David,
by looking to your interesting question from a Company treasury point of view and financial side, I would consider that the new approaches to the banking system, on line ones I mean, are not influencing the perception of liquidity of an investment of a CFO.
The idea that investors demand a premium for securities with longer maturities in principle should not be related with tthe way the Banks operate. The liquidity of an investment has inflence on risk perception in case of variable financial forecast or scenarios..
On the other hand I would say that the new tools are making easier and quicker to operate and not only: the rapidity of financial information is steering also the financial operations and decision process! So I am not precisely answering to your question but I rise a point , that might be contraddictory and controversial, about risk perception today, comparing to traditional old Banking systems .The liquidity preference and the risk perception are strongly related ! In this perspective then, it might exist a relation, from a CFO perception side but synonomous would not apply directly in relation to neo Banking, in my opinion. Of course by looking from a CFO side I am neglecting to consider the interactions of other economic variables and the endogenous money one.
Kind regards
Alberto
I forgot to add...Please see my publication "Renewable Energy in the Light of Fifty Years of Development Experiences, 1960-2010". It's among the articles I have uploaded in ResearchGate.
Dear David I did not know the notion of neo-banking. So I checked in the web and I found an interesting definition at the following link
http://www.pertechindustries.com/neo-banking-what-another-innovation/
As you will see neo-bank is defined as "an institution that provides checking, a prepaid debit card and some form of savings account without the traditional brick-and-mortar building. This usually includes features like mobile deposits, P2P payments, mobile budgeting tools and real-time digital receipts. In the U.S., these institutions are – directly or indirectly – FDIC insured."
Neo-banking provide easy and simple account start-up with strong digital support, and exceptional customer support. You do your banking via smart phones, at ATMs, or at locations like Wal-Mart or 7-Eleven.
Regarding your question, I think it could be right understanding this new phenomenon by using the theory of endogenous money. We should check it in countries where neo-banking is diffused, we have a higher velocity of circulation of money, and if the presence of neo-banking is demand driven.