The development of finance through these innovations contributed enormously to the subsequent development of the Western world. Since then, innovation in finance has continued. Banks are pushing less paper around. Records are kept centrally in computer systems. ATMs have replaced most functions of bank tellers. In our wallets, plastic cards have become just as important as, or perhaps more important than, banknotes and coins.
These changes, which provide the same or better service to clients at lower cost, are certainly innovations in the usual sense of the word, and we have little concern for their welfare effects. BIS central bankers’ speeches  1  What we worry about are those changes that are more often associated with the so-called “rocket science” side of banking. Take derivatives for example.