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Restrain the financial innovators?

Mostly, we agree that financial innovations, especially those driven by technology, such as ATM and PayPal are good. However, we are divided when it comes to certain types of financial innovations such as those relating to Securities. The financial/economic turmoil in the last 2 years has pushed many more of us to think that creativity in finance should be restrained. As we know, Governments are now trying to regulate everything "finance."

Should we hit the brakes on financial innovation? Or should we, as Megan McArdle (theAtlantic.om) says, "focus on developing the regulatory capacity to sort out the good innovations from the bad?"

Comments

  1. I think there is not much of a choice. You cant stop financial innovation, just like you cant stop any type of innovation, including destructive ideas that emerge from time to time. You CAN regulate them so that the innovations dont wreak such damage as the recent ones with CDOs and so on.

    Read also: http://baselinescenario.com/2009/4/18/financial-innovation-for-beginners/

    (the entire site is fabulous to learn about world finance).

    ReplyDelete

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