Seeking weapons of financial destruction
What are the world's most dangerous financial products?
Sven Giegold, a German member of the European Parliament is on a mission to find them and stamp them out.
The European lawmaker has launched a competition with two non-governmental groups, to find the next financial product - such as subprime mortgage or collateralised debt obligations (CDOs) - that could unleash turmoil on the financial world.
"Financial products can be dangerous in several ways," said Giegold. "They might be intransparent for investors, investing in harmful technologies or products, causing systemic risks or are unnecessarily complex."
Although there is no prize for the winner, Giegold hopes the competition will spur supervisors and regulators into taking more action, such as banning certain high-risk products.
Although many of the riskiest and most complex products, such as multi-tiered synthetic CDOs, unravelled five years ago when the financial crisis first struck, the shockwaves from products such as underperforming pensions and mis-sold payment protection insurance (PPI) are still being felt.
"Today's low interest rates provide a fertile ground to sell unsuitably complex financial products to investors looking for excess return," said Frederic Hache, a former banker who sold structured products and now works for Finance Watch, a public-interest group that seeks to shape regulation.
"Much remains to be done to curb unnecessary complexity in product design."
Those concerns were echoed by Paul De Grauwe, an economist with the London School of Economics and one of the most influential voices in assessing Europe's sovereign debt crisis.
"There is lots more regulation for sure but the banking model has not changed much," he said. "Banks continue to develop highly intransparent products."
The competition, which closes on February 15, will accept proposals on its website.