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September/October 1992, 
Vol. 74, No. 5
Posted 1992-09-01

Two Faces of Financial Innovation

by Mark D. Flood

Mark D. Flood uses two case studies to illustrate how financial innovations are developed to meet a perceived demand for new financial services. The two cases presented illustrate how market forces can spell failure for product designs that do not incorporate the principles of financial theory and success for those that do.