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

The capacity trap: Why advice firms can't hire their way out of the admin crisis

The capacity trap: Why advice firms can't hire their way out of the admin crisis

'You cannot outrun a broken process by adding more people to it'

Stuart Breyer
clock 10 March 2026 • 3 min read
The enduring value of advice in an era of DIY investing

The enduring value of advice in an era of DIY investing

'The debate is about execution and consistency'

Chris Ball
clock 10 March 2026 • 4 min read
Aberdeen's Kenny on 'hugely worrying' financial literacy gender gap

Aberdeen's Kenny on 'hugely worrying' financial literacy gender gap

Recent research findings

Jen Frost
clock 09 March 2026 • 3 min read