A superb (and apposite) essay from Steve Randy Waldman, writing in 2011, on why finance is necessarily complex and opaque, and why removing that complexity and opacity is impossible and undesirable:
“This is the business of banking. Opacity is not something that can be reformed away, because it is essential to banks’ economic function of mobilizing the risk-bearing capacity of people who, if fully informed, wouldn’t bear the risk. Societies that lack opaque, faintly fraudulent, financial systems fail to develop and prosper. Insufficient economic risks are taken to sustain growth and development. You can have opacity and an industrial economy, or you can have transparency and herd goats.”
The “faintly fraudulent” aspect reminds me of Dan Davies’s brilliant book Lying for Money, which I wrote about last year. A certain amount of fraud in a society is desirable; completely eliminating fraud would also completely eliminate all other forms of commerce.