Financial innovation delivers 'minimal' value - Turner

clock

The financial innovation of the past decade has delivered minimal economic value and increased financial instability, according to the FSA's chairman.

Speaking at The Economist's City lecture, Lord Turner outlined a number of reforms needed in the banking system to prevent future financial crises. He delivered a damning verdict on the 'originate and distribute' model of financing, where lenders packaged up loans to be sold on to investors, effectively keeping their liabilities off their balance sheet. The model has failed to deliver economic benefits in many cases, he says, while creating a number of risks that increased the dangers of financial instability. He believes this business model does have a role to play in the future, but...

To continue reading this article...

Join Professional Adviser for free

  • Unlimited access to real-time news, industry insights and market intelligence
  • Stay ahead of the curve with spotlights on emerging trends and technologies
  • Receive breaking news stories straight to your inbox in the daily newsletters
  • Make smart business decisions with the latest developments in regulation, investing retirement and protection
  • Members-only access to the editor’s weekly Friday commentary
  • Be the first to hear about our events and awards programmes

Join

 

Already a Professional Adviser member?

Login

More on Your profession

Culture is the most effective risk tool wealth managers are missing out on

Culture is the most effective risk tool wealth managers are missing out on

'Understanding a firm's culture is understanding its risk profile'

Bev Shah
clock 09 January 2026 • 5 min read
FCA sets October 2027 date for implementation of cryptoasset rules

FCA sets October 2027 date for implementation of cryptoasset rules

Issues further guidance

Michael Nelson
clock 09 January 2026 • 1 min read
WH Ireland shareholders back Team takeover in key vote

WH Ireland shareholders back Team takeover in key vote

FCA clearance still required

Sahar Nazir
clock 09 January 2026 • 3 min read