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By Anne-Laure Mention and Marko Torkkeli*
Financial innovation: Defining the concept
Financial innovation has been largely disparaged these days. According to Nobel Laureate Paul Krugman, it is hard to think of any major recent financial innovations that actually aided society (The New York Times, 2009). Critics of financial innovations argue that recent innovations were not targeting the enhancement of the ability of the financial sector to perform its social function (Joseph Stiglitz), embraced opaque pricing including billing tricks and traps that encourages unsafe lending practices (Pew Charitable Trusts, 2009), and had hardly any visible effect on the...
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