The new financial products can also be seen as an integrated part of the financial innovation spiral that follows the objective of an efficient market and of a intermediate competitive system (the success of these products on certain markets encourages the creation of additional markets which in turn encourages the creation of innovation and so further, the spiral can have as an effect marginal costs of transactions near zero and an increase in the dynamics of the market – Merton, 1990).
This spectacular crossing from bonds transactions to financial innovation will cause an increase in the liquidities of the last ones, in detriment of the first ones. One of the most important innovation that appeared in the financial markets is the creation, in 1980, of bonds based on loans, using as collateral the same asset. The process of collection and grouping loans and transforming them into bonds, with a greater liquidity and a lower risk will represent a different way of financing which influenced dramatically the role of financial intermediates in financial markets.
With all aspects, less clear of financial innovations the advantages of functioning of these markets are indubitable: the control of the risk attached to different financial products, the reduced cost of transactions (determined by the faster adjustment of the risk to the new information), the greater transitioning speed, the greater absorption power of a high number of transactions with no side effects, the increase of the liquidity on these markets.