Security Design: A Review

95 Pages Posted: 31 Oct 2022 Last revised: 26 Jan 2024

See all articles by Franklin Allen

Franklin Allen

Imperial College London

Adelina Barbalau

University of Alberta

Date Written: August 29, 2022

Abstract

Security design, which broadly speaking deals with the issue of designing optimal contractual mechanisms for overcoming various frictions between agents, is the subject of an extensive literature. This paper presents a review of recent work on security design and is organized around the applications of security design in various fields of finance starting with classic corporate finance applications such as capital structure and corporate governance, financial intermediation applications such as securitization and contingent capital, the interaction of market and security design, as well as emerging applications such as fintech, sustainable finance and healthcare finance. Open research questions and promising research areas are also discussed.

Keywords: capital structure, corporate governance, securitization, banking, fintech, sustainability

JEL Classification: D4, D8, G2, G3, Q5

Suggested Citation

Allen, Franklin and Barbalau, Adelina, Security Design: A Review (August 29, 2022). Available at SSRN: https://ssrn.com/abstract=4258499 or http://dx.doi.org/10.2139/ssrn.4258499

Franklin Allen (Contact Author)

Imperial College London ( email )

South Kensington Campus
Exhibition Road
London, Greater London SW7 2AZ
United Kingdom

Adelina Barbalau

University of Alberta ( email )

Edmonton, Alberta T6G 2R3
Canada

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