All these new techniques were made possible by the fact that financial firms have had the latitude to develop them and pursue the ones that appear to be most useful.
For all three techniques, the best approach for policymakers is to monitor developments, to insist that regulated firms practice sound risk management, to encourage transparency, and to avoid interfering with financial innovations that have the potential to improve financial stability, whether they occur inside or outside the realm of regulation. BIS Review 67/2002  5