Call for transparency

The turbulence created by speculation in GameStop shares has highlighted the lack of transparency on trading platforms. Roger Wattenhofer thinks it is time for a change, and calls for more open data not just in financial transactions, but in many other areas. The drama that unfolded around GameStop shares was in one sense helpful, by putting the spotlight on a generally murky side of the financial market. The episode began with a discussion among members of an investor forum on the Reddit website suggesting that the short-selling of GameStop shares had reached impossibly high volumes. A short sale (selling a share now and buying it back later at a hopefully more favourable price) is actually only permitted if the short sale is secured by a borrowed share. If a stock has been sold short excessively, there is very little danger in buying shares, because the short sellers of these shares must buy them back. When buyers pile into a share, the price goes up.