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This study examines the direct (out‐of‐pocket) flotation costs of new capital issues by bank holding companies between 1980 and 1986 and the total costs including any market effects of security issuance. A regression model is developed that relates the direct selling costs to the type of security being issued, the exchange on which the parent bank holding company is traded, information specific to the issue, and information specific to the firm. The model is highly significant, explaining over 80 percent of the variation in issuing costs. These direct costs, however, are small for equity issues when compared to information effects (stock price responses). When these costs are included, the costs to bank holding companies of issuing equity increase substantially and the direct costs of issuing preferred and debt are, generally, more than offset by positive stock price effects.

Examines recent innovations in the UK mortgage market and links these to the theoretical and empirical literature on the choice of mortgage instrument by households. Low inflation rates and employment insecurity have led to a demand for more flexible payment and amortization scheduling. Estimates a multivariate logit and a probit model to highlight the underlying determinants of amortization rates (mortgage maturity) from 1987 to 1991. Sees affordability criteria and the susceptibility of a household to financial problems as important determinants of extended mortgage maturities while the absence of these problems encourages shorter maturities, consistent with lifecycle behaviour. These choices provide the underpinnings to subsequent mortgage market innovations.

Finance has begun to utilize clinical approach in its research. The extent of its appropriate use is a serious point for consideration. Any adequate use of a research methodology would highly benefit from a deep understanding of its underlying worldview. This paper, therefore, discusses how worldviews underlie methodologies in general, and those of finance, in particular. It starts with a discussion on how any worldview can be positioned on a continuum formed by four basic paradigms: functionalist, interpretive, radical humanist, and radical structuralist. Next, the paper focuses on methodologies implied by the functionalist and interpretive paradigms, namely: scientific and clinical, respectively. Then, it notes that mainstream finance adheres to the functionalist paradigm. It examines how mainstream functionalist finance intends to use the interpretive clinical approach in its research. While this step towards a more balanced approach to research in finance is appreciated, the paper points out that clinical approach can be appropriately used only if certain fundamental, contextual, paradigmatic assumptions are met.