She has been most interested, among a wide variety of other subjects, in the connections that economic and financial policies have to financial crises. As a consequence, I have decided to speak about technology and financial services, and particularly about risk management, issues that I have spent a good deal of time addressing in recent years. As a related matter, I will comment on supervision and regulation as we move into the twenty-first century, and of course, I shall find a way to touch on the role of central banks. Without doubt, the acceleration in technology that has produced such an extraordinary effect upon our economy in general has had a particularly profound impact in expanding the scope and utility of financial products over the last fifteen years. Information technology has made possible the creation, valuation, and exchange of complex financial products on a global basis heretofore envisioned only in our textbooks, and even that just in recent years.
Derivatives are obviously the most evident of the many products that technology has inspired.
But the substantial increase in our calculation capabilities has permitted the putting into place of a variety of other products and, most beneficially, new ways to unbundle risk. What is really quite extraordinary is that there is no sign that this process of acceleration in financial technology is approaching an end. We are moving at an exceptionally rapid pace, fueled not only by the enhanced mathematical applications produced by our ever-rising computing capabilities but also by our expanding telecommunications capabilities and the associated substantial broadening of our markets. All the new financial products that have been created in recent years contribute economic value by unbundling risks and reallocating them in a highly calibrated manner. The rising share of finance in the business output of the United States and other countries is a measure of the economic value added by the ability of these new instruments and techniques to enhance the process of wealth creation.