Governor Dodge Says Transparency Essential for Financial Market Efficiency

    TORONTO, Dec. 10 /CNW Telbec/ - Recent market events have shown how
important it is to have appropriate levels of transparency and disclosure of
information for financial markets to function well, Bank of Canada Governor
David Dodge said today.
    In a speech to the Canadian Club of Toronto and the Empire Club of
Canada, Governor Dodge said that although many factors led to the market
turbulence that began seven months ago, a dearth of appropriate information
for investors was a key contributing issue.
    In recent years, investors searching for higher yields purchased complex,
often opaque and highly structured products that could not be readily valued,
the Governor said. This lack of transparency contributed directly to
uncertainty and to market turbulence, he noted.
    "Over time, market forces can still be expected to work out these
problems," the Governor said. "But markets need information to operate
efficiently. So, it is in the interest of market participants to make sure
that parties have access to all necessary information."
    Natural market forces will likely lead to greater transparency, said the
Governor. In the future, investors can be expected to demand more transparency
where it is now lacking, while vendors of financial instruments will need to
structure them in such a way that market players can clearly see what they are
buying, he concluded.

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For further information: Jeremy Harrison, (613) 782-8782

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