For Larry Summers, until a few days ago the United States Secretary of the Treasury, transparency also seems to be the in-word and the panacea. In typical fashion he explains his view at considerable length, but here is the short version. He says that there is a fundamental contradiction that policy-makers have to confront as they contemplate, for example, the regulation of financial markets. On the one hand, thanks to information technology, the business volume in the markets is growing dramatically, the speed of market dealings is accelerating and change characterizes the markets. At the same time, says Summers, human nature changes little.
People follow crowds.
There is euphoria in good times and panic in bad times. So, concludes Summers, the task of regulators in the markets is transparency. Even the conservative leaders of pension funds embrace the term. William Dale Crist, President of the enormous CalPERS pension fund group, says that it has become increasingly important to look for investment opportunities in emerging market economies. The important consideration to make these markets attractive to us is to ensure that there is real transparency.