请问高手，下面的这段话该如何理解？谢谢。

Financial development is defined by the extent to which individuals are able to use financial
contracts to insure against idiosyncratic risks. （这里面的risk是指禀赋风险和投资风险）

This is determined by two types of frictions:

the agents’ ability to divert a fraction of their income

and the ability to claim limited liability.

The first limits the feasibility of state contingent contracts.

The second restricts the capacity to borrow.

这部分我不太能理解，还望高手指点，谢谢！~~