Since the recent financial crisis, a typical reaction to any mention of financial innovation has been: “Did financial innovation not cause this crisis?” or “Does the world really need further financial innovation?”
Marc Chesney, Professor of Finance at the University of Zurich and external expert with the World Bank, will help you understand:
- How financial innovation can be improved to better serve society’s needs and reduce the risk of adverse consequences
- What kind of enabling framework could allow positive financial innovation to flourish
While financial innovation is generally perceived as a positive force for the development of financial systems, there is no doubt that some innovations in financial services mutated from their original purpose and contributed to the crisis.
The main reason is that many complex financial instruments associated with innovation such as collateralized debt obligations (CDOs) and credit default swaps (CDSs) were extensively used as vehicles in the credit expansion that led to the crisis.
Prof. Dr. Marc Chesney, Vice Director of the Institute of Banking and Finance, University of Zurich