In 2005, at Alan Greenspan’s “going away party”, an economist argued that “financial innovation” has created higher profits by taking on hidden risk.

Indian-born economist, Raghuram Rajan was sharply rebuked by the economic establishment’s attack-dog, Larry Summers.

It was August 2005, at an annual gathering of high-powered economists at Jackson Hole, Wyo. — and that year they were honoring Alan Greenspan. Mr. Greenspan, a giant of 20th-century economic policy, was about to retire as Federal Reserve chairman after presiding over a historic period of economic growth.

Mr. Rajan, a professor at the University of Chicago’s Booth Graduate School of Business, chose that moment to deliver a [50-page] paper called “Has Financial Development Made the World Riskier?” ..

He says he had planned to write about how financial developments during Mr. Greenspan’s 18-year tenure made the world safer. But the more he looked, the less he believed that. In the end, with Mr. Greenspan watching from the audience, he argued that disaster might loom.