With the November 15 and 16 G20 Summit in Brisbane fast approaching, policy makers and regulators in the US and the UK have been hard at work.  Not to be outdone, IOSCO, ESMA, and BIS have also been busy.  Eager to demonstrate progress on financial re-regulation and reform, there has been a flurry of consultation papers and rule proposals at all levels over the past quarter.  The following is a list, current as of October 9, 2014, of some of the more noteworthy proposals and consultation papers whose comment periods are currently open.  It should be noted that a number of these consultations close imminently.

While the traditional view of financial innovation emphasizes the risk sharing role of new financial assets, belief disagreements about these assets naturally lead to speculation, which represents a powerful economic force in the opposite direction.

Theoretically, financial innovation should make markets safer by spreading risk across a wider and deeper population of investors rather than concentrating it in the hands of a relative few.  A study published by MIT economist and assistant professor Alp Simesk, however, concludes that the opposite is true: financial innovation does not lower portfolio risk.  Rather Simesk finds that financial innovation creates opportunities for investors to take risks, or bets, on opposing sides of deep disagreements about the value of certain investments. Simesk concludes that this actually magnifies and multiplies risk rather than reducing it.   “In a world in which investors have different views, new securities won’t necessarily reduce risks,” says Simsek. “People bet on their views. And betting is inherently a risk-increasing activity.”