In 2007, during the first months of the crisis, the message from the banking sector was the following: "The solution will not come from more regulation, but from more transparency!" The underlying principle was to improve the control that the market's spontaneous operation allows, once the necessary information is accessible.

    What do we observe in 2009? Regulation has not made its reappearance for an excellent reason: it had never disappeared, but had deliberately been suppressed. As for transparency, the little that existed two years ago ... has since disappeared without a trace. How to explain this paradox?

    The authorities have not been passive: they have actively battled ... every attempt to establish greater transparency. Consider the Federal Reserve's refusal when asked to reveal the identity of the beneficiaries of its largesse. The reason invoked was that such information would undermine confidence in those institutions. Consider also central banks' enthusiasm for measures suspending the marking of financial products "to market," in order to return to their "theoretical value" - or "mythical value," to use Warren Buffett's expression - henceforth promoted as the "most reasonable" valuation in a period of crisis.

    In principle, transparency assures confidence: if one knows the financial situation of one's counterparties, one understands the risk involved in dealing with them. Unless, of course, the information available reveals their insolvency. This last point explains the authorities' ferocious resolve against any attempt at transparency which would have revealed financial establishments' widespread insolvency. Therefore, transparency had to be fought.

    With opacity now at the helm, confidence has disappeared. How can anyone hope, under these conditions, for a business recovery? Fortunately, there is an alternative to confidence: solidarity.

    When normal conditions prevail in the markets, measures for the maintenance of competition suffice to assure good order. But in the case of widespread insolvency, another rationale takes over for a more critical and urgent task: life support, not for individual companies, but for the system in its entirety. Then the authorities ask each company to act "as though" all the others are solvent until further notice. Solidarity has another advantage over transparency: it makes the return of regulation less pressing.

    Can the economy function on this basis? Probably, as long as the danger of the actual situation is visible to everyone. But once business appears to pick up, the natural tendencies of the market system will take over again and solidarity will fade away.

    Nevertheless, in a context where the embellishment of financial results is tolerated, confidence will not be able to reestablish itself. There will remain only one environment - people will not even talk about a "system" anymore - in the heart of which regulation will not have been reestablished and from which transparency will have disappeared, ruling out any return of confidence. Then it will be totally clear that all these procrastinating rearrangements, far from having offered the former system the opportunity to get well, will have, in reality, definitively killed it off.

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    Paul Jorion is an economist and an anthropologist.

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    Translation: Truthout French language editor Leslie Thatcher.

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