Such structures allowed higher-risk assets to appear to take on the qualities of lower-risk assets. The increased use of leveraged structured products was pioneered in major financial centres such as New York and London, although eventually, non-bank institutions began to market these products elsewhere, including here in Canada.
These relate in particular, to ownership, regulatory focus, development of financial markets, and bankruptcy procedures. Some of the serious shortcomings in the anticipated benefits of reform such as in credit delivery do need changes in legal and incentive systems. In particular, there is need to focus on reduction of transaction costs in economic activity, and enhancing economic incentives.