On the one hand, it is clear that this process was fuelled by fast economic growth and a rapid accumulation of savings in emerging markets. On the other hand, developed countries engaged in rapid innovation in the field of financial products, which allowed the more efficient channelling of domestic and global savings towards productive investments.
The most striking developments in this respect occurred with credit default swaps (CDSs) and securitised products. This increase in financial innovation may, in turn, have led to an inefficient allocation of resources, excessive risk-taking and over-leveraging of the system. Examples of such resource misallocation include the expansion of the US subprime mortgage market and of the shadow banking system.