These days, transparency is a financial buzzword. Opening the curtains on the operations of financial markets is supposed to help investors and regulators make better decisions. But sometimes transparency can backfire, according to new research from Michael Sockin, an associate professor of finance at Texas McCombs. He modeled two kinds of financial markets—for corporate bonds and short-term lending—and found that less transparency can lead to better economic outcomes.
Too much transparency can hurt financial markets
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