(iv) advances in ICTs have led to financial innovation– including a swathe of increasingly complex financial instruments—into which the excess liquidity was channelled, both directly into the purchase of derivative products but also indirectly—e.g. by allowing the funding of subprime mortgages which were then repackaged as MBSs and CDOs;
(v) while derivative products have the aim of better managing risk, instead a situation resulted where imperfect information existed over where risk lay or what can be described as the unknown geography of risk (through outsourcing and delocalisation); and therefore technological innovation further increased the risk of instability in the financial sector;
(vi) just as in 1987 when the October stock market crash was in part blamed on programme trading, so excess volatility in the stock market today is attributed to the role of computerised trading and algorithms (Grant and Gangahar, 2008).