Abstract:

Recent changes, especially caused by the COVID-19 pandemic, deeply affected financial markets all over the world. For years, the development of international financial markets has depended on the implemented financial innovations. Those innovations have created new financial instruments, minimized risk and supported liquidity. It can be assumed, that  in the nearest future the fluctuations will require some new proposals, supporting the financial markets in staying in motion The study presents theories of financial innovation along with a classification framework. In the article, the author hypothesized that many existing theories of creating financial innovations make it impossible to determine precisely which temporary factors can eventually become the cause of creating new innovations. However, alternative scenarios that do not assume innovations in the long run may provide constraints or even declines in financial markets - because they are well known at present.