Comments on: Innovation and Complexity in Finance

By: v p kochikar

v p kochikar — Sat, 29 May 2010 07:34:14 +0000

It’s completely true that much financial “innovation” consists of creating complexity designed to benefit the innovator rather than the customer. However it may not be entirely fair to single out the financial industry on this score – sadly, the same approach permeates and is indeed often central to “innovation” in every single industry. Having researched innovation for a living (so to speak!) For the past few years I’ve produced a list of over 50 such “innovations”, and the list is completely secular wrt industries. What’s even more interesting, the “innovations” in this list collectively represent revenues running into billions of dollars!

By: Krishna

Krishna — Sat, 24 Apr 2010 15:12:54 +0000

Basab, So generous of you to have given the so-called savvier finance firms a reprieve while saying trust ( in savvier GS) compensates for incomplete understanding of a derivative instrument. I don't think they trusted Goldman. I seriously allude it to their gross incompetence. In other words, that's as far as they could go in piecing it out… all the while reposing complete trust their ability to flush it down the throat of other unsuspecting fools that would stand to lose their shirt and more.

By: Jose

Jose — Sat, 24 Apr 2010 13:06:42 +0000

Not only in the world of consumer finance, even in Information Technology, companies do create complex terms to confuse clients. The intent is to deliver old wine in a new bottle or sometimes deliver water disguised as wine:) In order to interest/impress the client, thousands of terms/jargons – that no one really understands – are created everyday in the presentations.