As I noted in a speech last month, financial innovation can benefit consumers, the financial system, and the broader economy, but it also has risks that must be properly understood. 6 Indeed, as you know, financial innovations in areas such as structured credit products and mortgage lending in some degree helped precipitate the current crisis.
As far as October last year, some of the banks showed serious liquidity strain and had to be given financial support by the Central Bank in the form of an "Expanded Discount Window" (EDW) where the CBN extended credit facilities to these banks on the basis of collateral in the form of Commercial Paper and Bankers' acceptances, sometimes of doubtful value.