The Working Group on Responsible Innovation in Finance has spent a year studying and discussing the role and governance of New Product Committees (or New Product Approval) inside investment banks. These are the organizational spaces in which financial innovations are discussed at their design stage by a number of internal stakeholders. Risks and opportunities are accounted for, responsibilities are established and decisions are taken within these committees.
One conclusion of this work is that New Product Committees meet the conditions to become a crucial instrument for the development of responsibility in financial innovation. But, in order to do so, their role and governance need to be revisited.
In a recent discussion paper titled “Towards a practical approach to responsible innovation in finance: New Product Committees revisited”, this idea is explored further. The paper first lists the multiple interpretations of responsibility that should be taken into account, then proceeds to an empirical description of New Products Committees and to an analysis of their potentials to meet the several interpretations of responsibility. The paper concludes with a series of policy implications. The role of New Product Committees could be better formalized in regulatory frameworks, but also more open to scrutiny and revision. They could also play a more central role within the internal culture of the investment bank.
