The research revealed that innovations in finance commenced during the Mesopotamian civilisation in 3000 BCE and have occurred progressively since then(Wyman, 2012; Laevenet al., 2015). Financial innovations started with the conceptualisation and development of commodity money, which was followed by the development of personal loans and later by the development of banking facilities, bank deposits and banker acceptances (Lee et al., 2012). Innovation in financial instruments gained momentum after the development of metal money, which enabled the development of tradable contracts(Arthur, 2017b; Lee et al., 2012). Further evolution of financial instruments occurred in the 12th and 13th centuries spurred by the development of commercial practices in city states in North Italy (Schueffel&Vadana, 2015; Railiene, 2015). The development and growth of capitalism in subsequent years, characterised by private ownership and increasing entrepreneurial activity, boosted innovation in the area of financial instruments and led to the development of bonds, equities, cheques and other types of securities like preferred stock and convertibles (Su & Si, 2015; Arthur, 2017b). Financial activity in subsequent years was boosted by the opening of securities trading markets, the growth of railway, road and canal activity and the civil war in the USA (Laevenet al., 2015; Schueffel&Vadana, 2015). These developments, along with the recognition of the corporation as a legal entity spurred the development of complex and sophisticated financial instruments, including complex forms of bonds and equity, as well as financial securities, including income bonds and commercial paper (Owen et al., 2009; Mention &Torkkeli, 2012).
The last few decades, especially the period after the ending of the Second World War have witnessed substantial activity in this area, which has resulted in the development of numerous innovative financial instruments, including asset backed securities, collateralised debt obligations, futures, options and currency swaps (Sánchez, 2010; Owen et al., 2009).
Theme 2: Advantages and Risks of Innovative Financial Instruments
The review of literature revealed that growth in innovative financial instruments has been extraordinary in recent decades, spurred by the needs of various types of individuals, players and institutions(Cao et al., 2011; McNeil et al., 2005). These instruments, which are of various types, including shares, bonds, funds, derivatives, including forwards, options and swaps and asset backed securities have resulted in numerous types of benefits(Gianiodiset al., 2014; Corsiet al., 2016). Stocks are for example used by organisations to raise money from investors and are used by people for investment (ForrerAcie&Forrer Donald, 2015). The sale and purchase of stocks, which has occurred continuously since the development of the joint stock company has resulted in huge economic expansion over the years and to the growth of numerous types of organisations with associated benefits (Arnaboldi&a
