Exchange-traded funds have only existed for a little more than three decades. The first US ETF launched in 1993. By the end of 2008, the year of the crisis, US-based ETFs held $538 billion. That is now above $9 trillion, far exceeding the gain for Wall Street equities, and up some sevenfold over the period.

Proliferation is such that there are now more ETFs than there are listed stocks. Indexes, once designed to simplify the job of investors and help gauge overall market trends, have ballooned even more. There’s no precise census of all the financial indexes available, but they plainly dwarf the total number of stocks or bonds available anywhere on the planet. S&P Dow Jones Indices, publisher of the S&P 500 and the Dow Jones Industrial Average, calculates about 400,000 indexes daily. The figure for MSCI, which dominates emerging-market investing, is about 300,000. FTSE Russell calculates more than 50,000.

bloomberg.com - Excessive financial market liquidity is ruining capitalism