This is the story of how bankers with help from the members of Wall Street's Opacity Protection Team (this includes politicians, economists, think-tanks, rating firms, investment charter constrained asset managers and the financial regulators) undermined the global financial system by reintroducing opacity. The result of reintroducing opacity was the worse financial crisis since the Great Depression and the slowest economic recovery. Transparency Games is about the bankers of Wall Street and the City of London creating and maintaining a veil of opacity to hide behind as they rig the global financial markets for their benefit. Their bad behavior isn't constrained to simply misrepresenting financial products like toxic subprime mortgage-backed securities, but includes rigging the global interest rate, foreign exchange, commodity and equity markets so the bankers' bets pay off. The bankers' bad behavior affects everyone. Whether you are buying electricity or a house or you are investing in your pension plan, opacity lets the bankers take money from you that they are not entitled to. In addition to misrepresenting securities and rigging the global financial markets for their benefit, the veil of opacity also allowed bankers to manipulate the response to the financial crisis that began on August 9, 2007. They used it to sell the idea banks should be bailed out using taxpayer money for fear financial contagion would trigger a second Great Depression. Naturally, part of bailing out the banks was not holding the bankers accountable for their misbehavior or stopping their looting. Transparency Games offers an inside look at how Wall Street and the City of London bankers reintroduced opacity and cynically fight any legislative or regulatory attempt to restore or retain transparency in the financial system. Filled with engaging anecdotes, the book illustrates the principles of transparency using clear plastic and brown paper bags. Based on meticulous research, the book examines the role of transparency in our financial system; the flaw in the design of our financial system that allowed opacity to creep back in; and the response to our current financial crisis that retained opacity for the benefit of Wall Street and the City of London bankers rather than restoring transparency and saving Main Street. It is told by an individual who had the temerity and tenacity over two plus decades to actually fight to bring transparency to all the opaque corners of the global financial system. Based on this experience, Transparency Games introduces the solution for fixing the design flaw in the global financial system. The solution is the Transparency Label InitiativeTM. This solution restores transparency by using a label to steer investors away from blindly gambling. This effectively ends Wall Street and the City of London bankers' ability to hide behind the veil of opacity where they rig the global financial markets for the bankers' benefit. This solution also ends bank bailouts due to the fear of financial contagion and the problem of Too Big to Fail.
About the Author: Richard Field is the Director of the Institute for Financial Transparency, an organization focused on bringing valuation transparency to all the opaque corners of the financial system and the sponsor of the Transparency Label InitiativeTM. Since the mid-90s, he has been a leader in defining and implementing transparency in the structured finance industry. Mr. Field designed, developed and patented a low cost information system to handle all of the complexity involved in making each structured finance security transparent. His solution uses a data warehouse to provide all market participants with easily accessible, standardized collateral level data on an observable event basis over the life of each deal. In April 2008, Mr. Field wrote a Learning Curve column for Total Securitization that described the gold standard for transparency for structured finance securities. Subsequently, he consulted with the National Association of Insurance Commissioners on their July 2012 white paper on financing home ownership. In both of these widely read publications, he discussed the need for both timely disclosure of the underlying collateral performance information and the use of a data warehouse to capture, standardize and disseminate this data. Apparently, while his call for timely disclosure was ignored, his call for the use of a data warehouse was heard. In Europe, the European Central Bank championed the creation of the EU Data Warehouse to provide transparency into structured finance securities. in the U.S., Fannie Mae and Freddie Mac are in the process of building this data warehouse for residential mortgage-backed securities. It is called the Common Securitization Solutions LLC. About these two data warehouses, Mr. Field remarked, as the beaver said to the rabbit looking down on the Hoover Dam, "I didn't build it all by myself, but it is based on an idea of mine." Earlier in his career, he worked as an Assistant Vice President for First Bank System and as a Research Assistant at the Federal Reserve Board. Mr. Field has an MBA from the J.L. Kellogg Graduate School of Management at Northwestern University and a B.A. in Economics and Political Science from Yale University.