Fix Finance by Shedding Light on Its Complexities

Feb. 11 (Bloomberg) -- Economists teach us that a financialmarket is a powerful technology for processing information. Itbrings everyone’s knowledge and greed into play, devouring everyavailable scrap of information to achieve optimal risk sharingand put resources to the best possible use.

That’s the theory. In practice, things often don’t workthat way. The 2008 financial crisis demonstrated that theinformation processor, confounded by overly complex securitiesand specious AAA ratings, can easily misallocate resources andultimately grind to an inglorious halt.