Innovation in Finance Field

As soon as bad loans led market crash in 2008, everyone and his grandmother started blaming too much innovation in finance field.

Now, I know economics isn’t physics or cooking. I also know that derivatives and stuff like that could lead to disasters. Even if I didn’t know, I better know after so many years of disastrous market.

However, I am listing innovations in finance that have worked. Please help me with more.

  • The very concept of money is revolutionary
  • The concept of interest – a kind of acceptance that money can be used to generate money
  • The concept of compound interest – almost unfathomably profound
  • Everything around depreciation and so on
  • Paper money
  • Plastic money
  • Checks, banker’s checks and so on
  • Stock market (I know, just calm down. It works.)
  • Electronic transfers
  • Insurance – man, this is the most fantastic innovation. It is a direct application of statistics. Like it or not! Think of the risk coverage of ships in 18th century

In my humble opinion, after all other fields that saw a surge, finance too saw a surge of innovation.

It is a different matter that things went into a spiral – and again in the other direction.

I don’t want to blame finance sector for attracting talent and for innovation. At least not while blogging from my Android!

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