As humans, we continually strive for a greater understanding of why and how things happen. We continually search for transparency and we hold people accountable when they break our trust. This is a sign of a prosperous ecosystem which looks to move past negativity and deception, but why don’t we have this in the financial industry?

Often, businesses are criticized for wrongly breaking our trust while trying to hide their actions. Usually, these companies are held accountable but this doesn’t seem to be the case in the financial industry. Firms often operated under secrecy and do not disclose vital information. The result of limited transparency was the 2008 economic crash, which cost average citizens billions of dollars. Large financial institutions could operate with no accountability or repercussions.

This is an industry which handles the nation’s finances, the money of hard working citizens. We continually put our money in the hands of people who are simply untrustworthy and continually deceive their clients. Now, I am not saying every financial institution is untrustworthy, but this issue seems to be more pronounced in the financial industry over any other industry.

The banking and financial industry have seen an increase in regulation over the past eight years, a sign of a more transparent future. Although we now stand at the precipice of the reversal of these regulations. President Elect Trump is looking to reverse many of regulations surrounding the financial industry.

“This is going to be a president who will be the biggest regulatory reformer since Ronald Reagan,” Stephen Moore, an economic adviser for Trump stated after his presidential election. He believes that businesses will promote more economic growth with less federal government regulation. This is a valid argument, businesses would be able to become more innovative without having to focus on regulations. But where is the trade off with less financial regulations?

With less regulation comes less transparency. It may be easier for financial institutions to make money and create economic growth, but it allows firms with bad intentions to continue to operate. The less we know about firm’s activities, the more people’s finances are at risk.

Let’s assume for a second that the financial industry was fully transparent and open to criticism from the public overall business actions. This would only negatively affect the firms with questionable business practices. The firms who are legitimately creating wealth for their clients will continue to succeed far into the future. This is the ideal situation for industry; fair competition where the criminal entities are punished for their actions.

It is hard to see a time in the future where this is the reality, there is just too much money to be made in the financial industry. This is an industry where lobbyist have higher incomes than regulators, so why would anyone become a regulator? This is a major issue with no solution in sight.

It is hard to purpose a solution to the limited transparency in the financial industry. The limited accountability and transparency has ruined peoples lives. Transparency doesn’t destroy industries, it improves them and highlights the firms which have the best business practices. There is a reason why many people don’t trust financial institutions, and its because they aren’t transparent about their actions.

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