Systemic Risk and Financial Innovation: Toward a "Unified" Approach

This chapter, which presents the keynote address during the National Bureau of Economic Research conference held in Cambridge, Massachusetts, on November 6, 2009, revolves around the following question: What is the proper approach for understanding the critical relationship between systemic risk and modern financial innovation? It explores a "unified" approach, one that comprehends the underlying innovation process and an eclecticism as to academic and local knowledge.