The variety of financial products available for firms to raise funds has expanded rapidly in recent decades. This paper studies the role of innovations that introduce specialized financial products using...

The vast majority of regulatory debates about the benefits of centralized trading assume that the set of securities designed by financial intermediaries is immune to the market structure in which...

We develop a theory of financial innovation in which both market structure and the payoffs of the claims being traded are determined endogenously. Intermediaries use the cash flows of an...