Banking and finance
The quest for financial innovation has seen the introduction of the now-indispensable ATM, but also gave birth to synthetic debt instruments which a few years later were associated with the global financial crisis, says Patrick Jenkins
If any self-respecting investment bankers had been asked six years ago to name the greatest financial innovation of recent times, they would probably not have hesitated to name the collateralised debt obligation – a clever structure based on thousands of chopped-up mortgages and mortgage-backed securities.
The demand for the high, supposedly safe, investment returns that came with CDOs allowed ...
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