George F. Will discovers opacity and the need for transparency

In his Washington Post column, George Will makes the case for breaking up the big banks.  To justify doing this, he argues that breaking up the big banks would reduce opacity in the financial system at both the bank level and at the regulatory level.

Regular readers know that Mr. Will has reversed cause and effect.  It is transparency that ends the opacity of the banks and reduces the need for complex regulations and regulatory oversight.

If the banks are required to provide ultra transparency and disclose on an ongoing basis their current global asset, liability and off-balance sheet exposure details, market discipline will see how risky they truly are and pressure them to shrink.  It will be up to bank management and not regulators to figure out how to shrink.

This ends the problem with Too Big to Fail-Jail-Manage.

If the banks are required to provide ultra transparency, then the markets are no longer dependent on bank regulators to assess and communicate the risk of the banks and most of the combination of complex rules and regulatory oversight in Dodd-Frank can be eliminated.

This ends the problem of regulators substituting for the free market combination of transparency and market discipline.

Since the beginning of the financial crisis, I have wondered how long it would take Republicans and conservatives to champion transparency.