Why do we need transparency in financial markets?

institution, to the ability of added transparency to help participants to become well enough informed. ultimately rest on the decisions of private market participants. The better informed those participants are, the more productive our economy and the more stable our financial markets should be. Improved, well-targeted

Is greater transparency a prerequisite for improved market discipline?

Greater transparency is not by itself a sufficient condition for improved market discipline. Market participants need to know they have funds at risk to give them incentives to monitor and price risk appropriately. In that new resolution authorities and the living wills that will allow those authorities to act effectively, are critical.

Why did the financial system fail?

A variety of risks were poorly understood, poorly managed, and badly priced. And these decisions, inadequately in the size, leverage, and maturity mismatch of the financial system itself. Incentives were skewed – often years of good growth, mild recessions, and low and stable inflation.