New financial instruments such as derivatives and securitization have made it possible to unbundle risks - namely, credit risk, interest rate risk, and foreign exchange risk - of conventional BIS Review 61/1997  -6financial instruments such as loans and bonds, and trade these risks individually or as various combinations of risks.
The risks traded through the new financial instruments are no different from those originally incorporated in the conventional financial products. However, the range of services that financial institutions can provide has expanded significantly as it has become possible to trade only the risks without paying for or delivering the underlying asset.