What Lehman's fall tells us about transparency

One, it has left many investors potentially nursing large capital losses and, two, it has highlighted - in the worst possible way - the dangers of counterparty risk. The IMA, whose statement prior to Lehman's collapse now seems particularly prescient, has won plaudits for flagging the latter issue, and no doubt it had a valid point with respect to transparency: providers have, on the whole, failed dismally to tackle accusations of opacity. Clearly, the widely accepted practice of simply stating “assets provided by an issuer rated A by Standard and Poors” in marketing literature has to sto...