Free Global Financial Markets, More Transparent for Your Pleasure

Ramifications of the subprime mortgage market fallout continue to sprout up. As we've watched the ripples shut down deals around the world and shake a prominent Middle Eastern real estate company, there are now calls for international oversight of the US financial markets.

The International Herald Tribune reports from New Delhi that "politicians, regulators and financial specialists outside the US" want regulation on the financial products that the States are shipping overseas. Such proposals have been made in the past, when the US held a more commanding financial position around the globe. However, as the IHT puts it, "Washington might have to yield if it wants to succeed in imposing bilateral regulations on state-owned investment funds from other emerging economies."

The IHT quotes a German economic  official, "'America depends on the rest of the world to finance its debt," Bofinger said. "If our institutions stopped buying their financial products, it would hurt.'"

The cry is for transparency, but would transparency have satiated, or quelled, the appetite investors around the globe had for the medium- and high-risk collateralized debt obligations packed with subprime loans that they all bought up?

How would regulation temper the extreme, say, the blind fervor of the market?