From The Big Short by Michael Lewis, pg 172. This is a part of the story of the financial crisis which has received too little attention: ‘innovations’ in finance were driven by the ‘disruption’ the established figures in the industry were subject to as a result of new online competitors:
One of the reasons Wall Street had cooked up this new industry called structured finance was that its old- fashioned business was every day less profitable. The profits in stockbroking, along with those in the more conventional sorts of bond broking, had been squashed by Internet competition. The minute the market stopped buying subprime mortgage bonds and CDOs backed by subprime mortgage bonds, the investment banks were in trouble.