Imagine a driver's licence that reflected your driving history. The longer you had gone without a crash, the faster you would be allowed to go until your chance of crashing was judged about average, when you would be told to stick to that speed. Or imagine cars with better brakes that could take the place of airbags, or aero-engines whose increased reliability could be offset by less frequent maintenance, leaving airlines about as safe as they were in the 1950s. The main aim of innovation would be not to reduce risk but to make cars or flights cheaper. The idea seems absurd, yet it has underpinned thinking about financial stability for the past three decades-and is proving remarkably persistent.
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