BoE's Jenkinson on innovation and risk

Nigel Jenkinson, the executive director responsible for financial stability at the Bank of England, highlighted a number of frictions and market imperfections that lower the effectiveness of financial innovation.

"There may be insufficient information to gauge the risk in new financial instruments. And indeed information can get lost when a chain of parties are involved in the creation of new financial instruments. If these parties do not retain an economic interest in the performance of the

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