The article reiterates the authors' position that "products having no economic purpose except to achieve questionable accounting, tax or regulatory goals; or th

The article reiterates the authors' position that "products having no economic purpose except to achieve questionable accounting, tax or regulatory goals; or that raise serious concerns that customers will use them to issue materially misleading financial statements ... should, at a minimum, be labeled presumptively prohibited." Instead, I think the solution to the problem is to stop relying on financial accounting and instead disclose the actual transaction terms on a disaggregated basis. Accounting principles require the use of judgements by people (accountants, regulators, bankers, controllers) whose judgements have proven to be unreliable at best. The filters that these parties represent should should be removed and we should be allowed sufficient information to make our own judgements. By disclosing the actual details of a complex transaction on a timely basis, truly independent outsiders would be able to judge and report on the aggregate book, built from a line-by-line analysis. I like call this Real Transparency. This analysis has become technically feasible in recent years, thanks to faster CPUs, and the cost of distributing this information has dropped dramatically, thanks to cheaper storage and faster networks. Mandating this type of disclosure would be one of the really useful things the government could do. The current proposed reforms simply give more power to the regulators who permitted Enron, Madoff and Lehman. Complexity is not the real enemy of truth. It is people gaming a system with built-in opacity. Increase the transparency and there won't be any games left to play.