Cross-border trading and the volume of trade have increased exponentially and so has the complexity of products offered. History, however, has proven that financial innovation in an ineffectively regulated environment provides an avenue for market manipulation, and precedes excessive risktaking and market failures.
Microfinance is a good example. The large numbers of low income micro entrepreneurs were once thought to have very high credit risk to which commercial financial institutions have traditionally been averse. With appropriately priced and designed products, microfinance institutions have proven the profitability of serving a market that was previously viewed as unbankable.