Financial innovation has become a dirty phrase lately because of the role of complex securities – packages of mortgages and other liabilities – in the credit crunch and ensuing financial crisis. But the dirty secret is that if western economies are to recover properly, the funding will have to come from the markets. And such will be the competition for cash that some projects are likely to create fresh innovations to attract lenders.

One of those innovations is the risk transfer. A hot trade before the crisis, it is already returning. Robert Schiller, professor of economics at Yale, published a book in 2003 that proposed new financial instruments for individuals that would enable them to lay off, or “hedge”, the risks they run by trading contracts – a bit like how banks, companies and fund managers traded credit derivatives in the past decade. Worried, for example, that your chosen job track might not yield the sort of mid-career salary you'd like in 10 years? Create a contract in which you're paid a certain sum if your income falls below a set level.

Investors, Schiller promises, will be interested in making bets on this sort of thing. Indeed, these markets are being created for big organisations today. Take snowfall futures, designed so that cities or companies get a pay-out if winter snowfall turns out to be worse than expected. And just last month, a group of banks, pension funds and insurers announced they were developing a new market for longevity products – the risk that people live longer than expected.