The case against too much transparency

04/21/2009 | Knowledge@Wharton

A common, simple explanation for the financial crisis goes something like this: A lack of transparency in complex financial dealings led investors to pour money into bad investments they didn't understand. So the obvious antidote is to make trades more transparent, right? Not so fast, say economists Paulo Volpin and Marco Pagano, who argue that issuers and investors both need a certain amount of secrecy to profit.

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