Financial Innovation of Mass Destruction—The Story of a Countrywide FX Options Debacle

Astonishingly little attention has been paid in academic literature to the 2008–2009 foreign exchange (FX) options debacle Poland, scale of which was unheard of. It affected not only an individual organization but a significant part economy, being example situation operational risk at company level could have impacted systemic risk. The research provides evidence dark side financial innovations through analysis countrywide case on emerging market, utilizing primary qualitative content (QCA) over 750 documents (including press releases, public authorities’ accounts, and corporate statements). that FX caused by institutions shrouded some aspects innovative securities or took advantage information asymmetry exploit uninformed clients. study concludes both adequate legal regulations proper management are crucial avoid similar failures.