Corporations can now protect themselves from all sorts of risks which weren't possible before using swaps and future instruments.
Innovations in debt financing drove the huge economic growth of the last two decades. Mobile phone technology would never have taken off if cellphone companies couldn't have used debt financing to build huge cell tower infrastructures.
CMOs for all the problems they caused, did allow for a huge increase in home ownership. For every default there are dozens of paid-up home owners who could never have afforded to buy a house otherwise.
Electronic Government bond auctions have driven down the cost of government borrowing, leading to lower taxes.
Forex costs have dropped massively. Look at your laptop. It's likely that during the manufacture dozens of countries were involved and likely hundreds of currency transactions. You paid less for your laptop because of a decade of innovation in the FX markets.
Comments
Corporations can now protect themselves from all sorts of risks which weren't possible before using swaps and future instruments.
Innovations in debt financing drove the huge economic growth of the last two decades. Mobile phone technology would never have taken off if cellphone companies couldn't have used debt financing to build huge cell tower infrastructures.
CMOs for all the problems they caused, did allow for a huge increase in home ownership. For every default there are dozens of paid-up home owners who could never have afforded to buy a house otherwise.
Electronic Government bond auctions have driven down the cost of government borrowing, leading to lower taxes.
Forex costs have dropped massively. Look at your laptop. It's likely that during the manufacture dozens of countries were involved and likely hundreds of currency transactions. You paid less for your laptop because of a decade of innovation in the FX markets.