Financial innovation, which was originally introduced for a positive aim, over time has actually had relevant negative effects on the economy. This occurred because it encouraged intermediaries to change their way of operating, allowing them to modify their solvency without changing radically their external shape. Financial innovation, which developed on account of both the need to finance the growing USA external debt and the tendency of American families to incur into excessive debts, is certainly the main cause lying behind the recent financial crises. In the future, these can be avoided only by means of a strict regulation of financial markets.
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