It has been suggested that financial innovation is central to economic growth and prosperity and that, consequently, financial system regulators should resist over-regulation that might thwart...

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Financial Innovation
Abstract
According to the various economists it is important for any company or the industry to make
innovations in the techniques of production. This is because the cost of production can be
reduced. According to the survey done by the governments of different countries, almost all the
companies and the businesses are engaged in innovations. This leads to an increase in the profit
margin of the company and the company gets boosted up in order to take up more and more
investments. This leads to the increase in the employment opportunities of the country and helps
the economy to grow and develop.
Countries involve in the innovations generally helps the other countries as well in order to have
the utilization of the techniques made and introduced by them. These innovations can have both
the effects, i.e. positive and negative. It generally has a positive effect for those who analyze
their innovation and make the necessary changes if required. The financial innovation is equally
important in the financial system of the company as it helps inn proper management of the
resources and the funds of the company. Hence, it can be said that the, financial innovations is
the most important aspect of a company.





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INTRODUCTION
“The primary function of the financial system is to facilitate the allocation and deployment of
Economic resources, both spatially and across time, in an uncertain environment.” (W. Scott
Frame, Pg. 3). As mentioned in this excerpt, financial system is one of the most important aspect
of any business or an industry as it helps allocating the economic resources of the country in the
most efficient way. It is with the help of these systems that a company can utilize its funds that
had been borrowed from the public in the form of loans, debentures, etc (The Federal Reserve
Bank of San Francisco: Economic Research, Educational Resources, Community
Development, Consumer and Banking Information). The company would be able to take up
proper insurance policies and would be able to secure the future of the company if any problem
arises.
BODY
There are certain groups in which this financial innovation is divided. It includes new products,
new services, new organizational forms, etc. The financial auditor of the company has to initiate
various innovations in the company financial system. With the introduction of these innovations,
the company will be able to perform better in the long run as well. After the innovation has been
made, it is important to diffuse, i.e. to spread it amongst the industry, so that it can be utilized in
the best possible and efficient way.
Financial innovation refers both to technological advances which facilitate access to information,
trading and means of payment, and to the emergence of new financial instruments and services,
new forms of organization and more developed and complete financial markets (European





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Central Bank, FCB Financial Innovations, para 3.). Innovation is clearly one of the most
important aspects of the modern economy. Without...