Would knowing prices on the most recently traded collateralized debt obligations (CDOs) have tempered that market in the run up to financial markets collapsing in 2008, and might some of the more spectacular deal collapses have been averted?

Looking in the rearview mirror is always problematic. Evidence suggests, however, that greater pricing transparency in the U.S. corporate bond market has caused those securities to trade within a more predictable range, and an objective view of prices in the CDO secondary market back then likely would have emitted helpful warning signals. Soon, participants in the asset-backed securities (ABS) market will be privy to that information on a timely basis and they’ll be able to determine for themselves the advantages—and perhaps disadvantages—of greater transparency.

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