Four decades-worth of extraordinary financial innovation were, until recently, regarded as cause for congratulation among Anglophone policymakers and bankers. The events of the past two years have put an end to that.

Among those now highlighting the dangers of financial innovation is Lord Turner, head of Britain’s Financial Services Authority. As well as stirring up controversy over the bloated size of the financial sector in the latest issue of Prospect magazine, he argued that much financial innovation was socially useless. Is it time, then, for regulators to incorporate a bias against such activity?