Since 2008, new financial products have been greeted with skepticism. To be fair, the creation of “innovative” financial products has historically led to more harm than good: the credit default swaps of the Global Recession exhibited the creative capacity of the finance industry, but for all the wrong reasons. Perhaps the Global Recession sparked a fundamental change in how the finance industry began designing products.
Many financial instruments have emerged with the needs of the community and environment as the center of the design, while maintaining a positive ROI for the investors. These new financial products now play a major role in the world of impact investing, where not only traditional asset classes are being disrupted, but wholly new asset classes are being created.
Many new financial products are being put to use across sectors, geographies, and global issues. While many products are innovative, none are perfect. This series of articles will explain how and why a financial product works, and identify problem areas and barriers to implementation.
Each blog will cover the following:
Background and issue – Defining the factors that led to the development of this financial product.
The design – A description of how the financial product works.
The benefits and realities – An analysis of whether or not the product actually solved the issue it set out to address.
What’s next? – Recent news and trends pertaining to this product.
Click the links below to visit the blog posts:
- FPFG 1.0: Social Impact Bonds | Bruno Lam
- FPFG 2.0: Guarantees | Jana Svedova
- FPFG 3.0: Equity Crowdfunding | Varun Srivatsan
- FPFG 4.0: Microfinance | Varun Srivatsan