The issues in today's crisis – and indeed in the most important crises, historically – can best be understood as a manifestation of asymmetric information in an environment of rapid financial innovation. The present paper reviews the asymmetric information and financial innovation frameworks...

Financial innovation is inextricably tied to asymmetric information and therefore sets the stage for financial crises. Over history, every truly meaningful crisis has had elements of asymmetric information, particularly affecting innovative financial instruments that are primary market...

This Note briefly examines the dynamic interaction that can develop between pension funds and capital markets. Pension funds are not only a source of long-term savings to support the development of bond and equity markets. They can also be a positive force for innovation, for corporate...