This led them to be too sanguine about risks, on the assumption that if you don't understand it, don't tinker with what appears to be a good thing. As we are all aware, Barings was an a prime negative example of what went wrong when senior management did not understand where the apparent profits were coming from. LTCM was another example where even the most sophisticated regulators did not appreciate the systemic risks of non-monitoring of large positions by hedge funds. Thus, there is an important public good in investor education, just as there is a high return on investing in staff education. The greater the understanding of the individual rights and responsibilities of the investor, the employee, the consumer, the corporation and the authorities, the more efficient are the markets.
Information thus helps to delineate property rights and responsibilities, on which markets thrive.
The education of the market participants, from investors to intermediaries, is helpful to the working of the market. Benchmarks or Standards 19. The delineation of property rights can only be achieved with better defined standards of measurement and valuation and clear set of regulations and laws. Transparency is only useful if there is adequate and timely disclosure of objectives and standards by which performance can be judged. Information is classified by accounting standards.