Has Finance Made the World Riskier?

  title={Has Finance Made the World Riskier?},
  author={Raghuram G. Rajan},
  journal={Macroeconomics eJournal},
  • R. Rajan
  • Published 11 August 2006
  • Economics
  • Macroeconomics eJournal
Developments in the financial sector have led to an expansion in its ability to spread risks. The increase in the risk bearing capacity of economies, as well as in actual risk taking, has led to a range of financial transactions that hitherto were not possible, and has created much greater access to finance for firms and households. On net, this has made the world much better off. Concurrently, however, we have also seen the emergence of a whole range of intermediaries, whose size and appetite… 

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