Opacity led to turmoil - Canada's Dodge

David Dodge, the governor of the Bank of Canada, believes a lack of transparency is partly to blame for the recent turmoil in the financial markets.

Speaking in London on Wednesday, Dodge said: "One lesson [from the current crisis], which I hope will be clear to everyone, is the absolute importance of transparency if markets are to function properly." Dodge added: "Vendors of financial instruments need to structure these investments in such a way that market players can clearly see what they are buying. Credit-rating agencies need to clearly indicate that their ratings for highly structured products should not be used with the same degree of certainty as their ratings for conventional, single-name issuers."

But the governor was also quick to point out that investors should be more cautious and diligent: "Investors should not rely simply on the pronouncements of rating agencies to deliver their seal of approval! Instead, they must do their own homework and make a concerted effort to understand what they are buying."

To read the speech, click here