Further, complexity was introduced with regard to some of these innovations, often to undermine the regulatory prescriptions regarding transparency or capital adequacy, or to mislead the counterparty. Shadow banking enabled undermining of regulatory prescriptions. Most recent initiatives with regard to reforms in regulation address these issues.
For many developing and emerging economies, who are progressing on the path towards optimal financialisation, it is necessary to avoid excessive financialisation, and more importantly to explore the impact of finance on growth, ideally on the basis of empirical evidence.